Private ruling: Capital gains tax - same-asset rollovers
Date of advice: 8 April 2016
Published: May 2016
Ruling period: Year ending 30 June 2016
Date scheme commenced: 1 July 2015

Ruling: Q1: Will you be eligible for the capital gains tax (CGT) same-asset rollover relief when you transfer your shares to your discretionary family trust? | A1: No.

Relevant facts and circumstances: You hold a percentage of shares in company A. You are considering on transferring your shares in company A, at original cost into your discretionary family trust. The discretionary trust has a corporate trustee. You are the sole director and sole shareholder of the trustee company. You are also the sole nominated beneficiary in the trust deed.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 126, | Income Tax Assessment Act 1997 section 104-60, | Income Tax Assessment Act 1997 section 112-140 and | Income Tax Assessment Act 1997 section 112-150.

Reasons for decision: Summary: Under Division 126 of the Income Tax Assessment Act 1997 (ITAA 1997) you may be able to defer a capital gain or capital loss when assets are transferred or disposed of in the following circumstances: • an individual or trustee transfers a capital gains tax (CGT) asset to a wholly owned company • partners transfer their interest in a CGT asset to a wholly owned company • related companies transfer a CGT asset between them • a trust disposes of a CGT asset to a company under a trust restructure • a change to the trust deed of a complying approved deposit fund, a complying super fund or a fund that accepts worker entitlement contributions triggers a CGT event for the fund • a CGT asset is transferred from one small super fund to another because of a breakdown of the relationship between spouses or former spouses • a trustee of a trust creates a trust over a CGT asset or transfers a CGT asset to another trust where both the transferring and receiving trusts meet certain requirements. As your arrangement does not meet one of the circumstances above, you would not be entitled to CGT same-asset rollover relief.