Private ruling: Capital gains tax: testamentary trust: cost base of pre CGT shares
Date of advice: 3 June 2019
Published: August 2019
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Is there a CGT event when the shares held by the testamentary trust are transferred to the beneficiary? | A1: No, ATO Practice Statement Law Administration PS LA 2003/12 Capital gains tax treatment of the trustee of a testamentary trust confirms the Commissioner's longstanding administrative practice of treating the trustee of a testamentary trust in the same way as a legal personal representative for the purposes of division 128 of the Income Tax Assessment Act 1997 (ITAA 1997). | Q2: Is the cost base of the transferred shares the market value of the shares as at the date of death of the deceased? | A2: Yes, the cost base and reduced cost base of the asset in the hands of the beneficiary is calculated in the same way as it would have been if the asset had passed to them from the deceased's legal personal representative. As the shares are pre CGT shares, this is the market value of the asset on the day of death in accordance with section 128-15 of the ITAA 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 died in 20XX. The will of the deceased left the residual of the estate to the beneficiary. The residual consisted of a share portfolio comprised entirely of pre CGT shares. The shares were recorded in the Testamentary Trust at the market value as at the date of death of the deceased. The trust will be vested and the shares transferred to the beneficiary.

Relevant legislative provisions: Income Tax Assessment Act 1997 division 128 | Income Tax Assessment Act 1997 section 128-15