Private ruling: CGT - disposal of shares
Date of advice: 26 March 2026
Published: 18 May 2026
Ruling period: Income year ended 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Did a capital gains tax (CGT) event A1 happen when the shares were transferred from person A to person B? | A1: Yes

Relevant facts and circumstances: On the DD MM 20YY, person A passed away. Prior to their passing, person A was diagnosed with a terminal illness. Both person A and their spouse, person B, had commenced the process of trying secure accommodation in a nursing home after person A left the hospital. A deposit was required to secure a room. To obtain the funds for the room, person A would have had to sell some shares. Due to person A's illness, a decision was made by Person A to transfer the ownership in the shares to person B and Person B would own the shares in their name. You have advised that the plan was for Person B to sell the shares when required to secure the funds for the nursing home accommodation. Person B was advised by their brokers that an off-market transfer could be arranged to transfer shares into their name. This would avoid selling the shares in the open market. They did not seek any tax advice on this matter. On DD MM 20YY, Person A signed the transfer form for the shares to be transferred to Person B. On DD MM 20YY, the transfer of the shares to Person B was completed. When person B approach their tax agent to complete their annual tax return for the year ended 30 June 20YY, they were advised that the act of transferring the shares into their name constituted a CGT event (for person A) under section 104-10 of the ITAA 1997.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-25 | Income Tax Assessment Act 1997 section 104-20

Reasons for decision: Summary: Person A signed the transfer form for the shares to be transferred to Person B. Person A authorised the transfer of their ownership of the shares as indicated on the form. For the purposes of capital gains tax this means a CGT event A1 occurred at the time the shares were transferred to Person B. | Detailed Reasoning - Detailed reasoning: Under section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997), you make a capital gain or capital loss if a CGT event happens to a CGT asset that you own. Shares are considered a CGT asset because they are a form of property that you own and can later dispose of. CGT event A1 happens if you dispose of a CGT asset that you own, if a change of ownership of the asset occurs from you to another entity and you stop being the assets' owner, whether because of some act or event or by operation of the law. Under section 104-10 of the ITAA 1997, the time of the event occurs in the time that you enter into the arrangement for the disposal of the asset. | Detailed Reasoning - Application to your circumstances: A CGT event A1 happened as a consequence of person A having signed a form authorising the transfer of the shares from them, as the owner, to person B as the new owner of the shares. The timing of the CGT event was the date the change of ownership occurred, which was DD MM 20YY. This was the date the transfer of the shares to person B was completed and person A ceased being the owner of the shares. The Commissioner of Taxation has no discretion under the CGT provisions to disregard the transfer of the shares from Person A to Person B. Given the facts presented, a CGT event A1 occurred as a result of the transfer of the shares to person B. The net capital gain must be declared as assessable income in Person A's income tax return. If the shares were acquired and held for at least 12 months prior to transferring the shares to Person B, the 50% CGT discount can be applied to the gain on the disposal.