Private ruling: CGT - beneficial ownership
Date of advice: 15 November 2021
Published: February 2022
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the off-market transfer of shares result in a capital gains tax (CGT) event? | A1: No. CGT event A1 happens when you dispose of a CGT asset. The beneficial owner of the CGT asset will be liable to determine the capital gain or loss from the event. In this case, we accept the beneficial owners are different to the legal owner. The beneficial owners, you and your sibling, have held proportionate ownership interests in the shares since they were acquired. Therefore, upon legal title transfer when the off-market transfer occurs, there will not be a CGT event as you both remain the beneficial owners. Further information on a beneficial owner can be found in TD 2017/11 Income tax: who should be assessed to interest on bank accounts?

Relevant facts and circumstances: You and your sibling purchased shares in 19XX. As your sibling was a minor, their share account had to be placed in your name as well. You contributed XX.X% to the purchase and your sibling XX.X%. You have reported dividends in your income tax returns in proportion to your ownership interest. To transfer legal title you will split the share holdings into separate share accounts in line with your proportionate ownership interests in an off-market transfer.

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