Private ruling: CGT and rollover effect
Date of advice: 7 October 2021
Published: December 2021
Ruling period: Year ending 30 June 2022
Date scheme commenced: 1 July 2021

Ruling: Q1: Will roll-over relief be available under Subdivision 122-A of the Income Tax Assessment Act 1997 (ITAA 1997) where you transfer shares owned personally to a company wholly owned by you, when that company is a newly established company with no assets owned prior to the transfer of shares? | A1: Yes . Roll-over relief be available under Subdivision 122-A of the ITAA 1997 where you transfer shares owned personally to a company wholly owned by you.

Relevant facts and circumstances: You are considering transferring shares you own personally to a new company, where you will be the sole director and shareholder. You are, and the new company once incorporated will be, a resident of Australia for Australian income tax purposes. An off-market share trade will be completed to transfer the shares at their current value from you to the new company. The consideration received will be shares in the new company. The shares in the new company will not be redeemable shares. The market value of the shares received for the trigger event will be substantially the same as the market value of the CGT asset created in the new company.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 122-20 | Income Tax Assessment Act 1997 section 122-25 | Income Tax Assessment Act 1997 section 122-35