Private ruling: Capital gains tax: CGT event: splitting shares
Date of advice: 16 April 2019
Published: June 2019
Ruling period: Year ending 30 June 2019 | Year ending 30 June 2020
Date scheme commenced: 1 July 2018

Ruling: Q1: Will the splitting of each share result in a capital gains tax event? | A1: No. While there is a change in the form of the original shares, there is no change in their beneficial ownership. | Q2: Will the cost base of the split shares be determined by apportioning the cost base of the original shares? | A2: Yes. The Commissioner considers it is reasonable to apportion the cost base across the split shares by dividing the cost base and/or reduced cost base of each share by two. | Q3: Will any capital gain which may arise to the estate be disregarded upon transfer of the shares to the testamentary trusts? | A3: Yes. The Commissioner considers that if any capital gain arises to the estate, it is disregarded by the operation of Division 128 of the Income Tax Assessment Act 1997.

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. The deceased owned a share in a company. The will of the deceased leaves the residuary estate to two separate testamentary trusts. The above share forms part of the residuary estate. The share will be split into two shares and transferred equally to the testamentary trusts.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 104-55 | Income Tax Assessment Act 1997 section 120-20 | Income Tax Assessment Act 1997 section 128-10