Private ruling: Cost base of capital gains tax assets
Published: January 2013
Ruling period: Year ended 30 June 2010
Date scheme commenced: On or after 1 January 1994

Ruling: Q1: Can the closing value provided by the Australian Stock Exchange on the date of acquisition of the securities used as a starting point to calculate the capital gains tax cost base or reduced cost base? | A1: Yes.

Relevant facts and circumstances: During relevant year, CGT assets including shares, stapled securities and units purchased by the deceased were disposed of by the Executor of deceased's estate. Due to circumstances beyond your control records relating to the cost base of the financial instruments of the deceased have been unable to be obtained. During the time the deceased held securities, bonus shares were issued, tax deferred payments were made, rollover relief was available and a simplification of shares and units was also carried out.

Relevant legislative provisions: Income Tax Assessment Act section 110-25, | Income Tax Assessment Act section 121-20, | Income Tax Assessment Act subsection 121-20(5) and | Income Tax Assessment Act subsection 128-15(4)

Reasons for decision: Summary: Subsection 121-20(1) of the Income tax Assessment Act 1997 (ITAA 1997) states that you must keep records of every act, transaction event or circumstance that can be expected to be relevant to working out whether you have made a capital gain or loss from a CGT event. Subsection 121-20(5) of the ITAA 1997 states that if the necessary records do not already exist, you must reconstruct them or have someone else reconstruct them. As you do not have the required records you must reconstruct them. The starting point for the calculations can be the closing value provided by the Australian Stock Exchange on the date of acquisition of the shares, stapled securities and units. The information provided in a previous ruling must also be taken into account when reconstructing the records.

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