Private ruling: Acquisition, transfer and sale of shares
Date of advice: 3 December 2015
Published: March 2016

Ruling: Q1: In the event that a future disposal of shares in a company ('Shares') attracts the operation of the CGT provisions in Parts 3-1 and 3-3 of the ITAA 1997, do section 109-5 and section 109-10 of the ITAA 1997 apply such that you will be taken to have acquired the Shares in the year in which they were issued to you? | A1: Yes. | Q2: Does section 106-50 of the ITAA 1997 apply to you in respect of the Shares held by Entity A as your nominee such that: • the cost base of the Shares will be determined as a cost base to you under Part 3-1 of the ITAA 1997; and • the transfer of the Shares from Entity A to you will not constitute a CGT event under Division 104 of Part 3-1 of the ITAA 1997? | A2: Yes. | Q3: Does section 126-5 of the ITAA 1997 apply to the transfer of some of the Shares from you to your former partner such that there is a rollover under Division 126 of Part 3-3 of the ITAA 1997? | A3: Yes. | Q4: If you sell the Shares in the course of Schemes 1, 2 or 3, would any gain made by you on the disposal of those Shares be assessed solely as statutory income within Parts 3-1 and 3-3 of the ITAA 1997 and not as ordinary income? | A4: Yes, subject to the following conditions: • the Shares are not trading stock as you are not, and will not be, holding them as part of a business of buying and selling investments; • the Shares are not 'revenue assets' (which are assets of which disposal is inherent in, or incidental to, the carrying on of a business, and which do not include trading stock) as you are not, and will not be, carrying on a business, where the sale of those Shares would be inherent in, or incidental to, that business; • you do not sell the Shares as part of a business operation or commercial transaction; and • the Shares have been, and will continue to be, held as a long-term investment.




Subject: Acquisition, transfer and sale of shares: In order to protect the privacy and commercial in-confidence components of this private binding ruling the following question and answers are provided.