Private ruling: CGT - beneficial ownership
Date of advice: 27 June 2023
Published: 14 August 2023
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Did a capital gains tax (CGT) event happen when you transferred the shares to your child? | A1: No. Having considered your circumstances and the relevant factors relating to your situation, the Commissioner accepts that although you were the legal owner of the shares, it was never intended for you to have any beneficial ownership of the shares. Therefore, CGT event A1 or any other CGT event did not happen when your legal ownership ended.

Relevant facts and circumstances: At some time after 1985, one of your parents passed away. Under their will, they bequeathed shares to your child. A share registry advised you couldn't register the shares in your child's name as they were a minor. Shortly after your parent's death, you registered the shares in an account named "Your name - Your child's name A/C". Your child did not have a TFN. You arranged for the dividends to be paid into your child's bank account. Several years later, your child turned 18 years old. Shortly after, you transferred the shares to your child via an off-market transfer as advised by the share registry.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104-10