Private ruling: Capital gains tax
Date of advice: 9 August 2024
Published: 23 September 2024
Ruling period: Year ending 30 June 20XX
Date scheme commenced: XX XX 20XX

Ruling: Q1: Did CGT event A1 happen to you upon implementation of the Scheme of Arrangement? | A1: Yes. CGT event A1 happens if there is a change in the ownership of a CGT asset (section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997)). The event happens when you enter into a contract to dispose of the asset or if you have not entered into a contract, when the change of ownership occurs (subsection 104-10(3) of the ITAA 1997). The disposal of your shares under a court approved Scheme of Arrangement results in a disposal of shares, but not because you entered into a contract for disposal. Therefore, CGT event A1 happened on the scheme implementation date when there was a change of ownership in a Company A share from you to Company B under the Scheme of Arrangement (subsections 104-10(1) and (2) and paragraph 104-10(3)(b) of the ITAA 1997).

Relevant facts and circumstances: You held shares in a company (Company A). Company A was acquired by another company (Company B). The scheme was implemented on XX XX 20XX at which time your shares were acquired by Company B.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 104-10 (3)