Private ruling: Capital gains tax - beneficial ownership
Date of advice: 15 September 2020
Published: November 2020
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will CGT event A1 in section 104-10 of the Income Tax Assessment Act 1997 happen to the Company) upon the transfer of leases to its shareholders? | A1: No. When the Company transfers the assets to its shareholders, there will not be a change in the beneficial ownership of the asset, as the Company acts only as nominee for the shareholders of the Company. As such, CGT event A1 will not occur.

Relevant facts and circumstances: The Company was formed to be the registered holder of assets. The Company has X shares on issue. The shareholders are not in partnership, a cooperative or a single enterprise, and the incorporation of the Company was necessary to be granted approval under applicable legislation at the time. The parties have understood that the Company is acting as nominee and have treated the share in the Company as the acknowledgement of a separate and distinct interest in the assets. The Company has never received any income from the shareholders and has never lodged a tax return. Legislative and policy changes will now allow the Company to apply to create separate the asset. The assets will be transferred to the respective shareholder.

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