Private ruling: Capital gains tax - shares - transfer
Published: December 2012
Ruling period: Year ended 30 June 2013
Date scheme commenced: 1 July 2012

Ruling: Q1: Will a CGT event occur if shares are transferred from joint names into individual names? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1997 section 102-20 | Income Tax Assessment Act 1997 section 104-10 | Income Tax Assessment Act 1997 section 116-10 | Income Tax Assessment Act 1997 section 116-20 | Income Tax Assessment Act 1997 section 116-30

Reasons for decision: Summary: You make a capital gain or capital loss when a capital gains tax (CGT) event happens to a CGT asset. CGT event A1 happens when you dispose of an asset. You dispose of a CGT asset if a change in ownership occurs from you to another entity. An interest in an asset is considered to be an asset for CGT purposes. The shares that you acquired are CGT assets. Where you transfer an interest in a share from joint names into individual names, you have disposed of 50% of your ownership of the shares and as such CGT event A1 occurs. This is because the ownership of the share has changed from being owned jointly by you and your spouse, to being owned by you and your spouse individually. For most CGT events your capital gain is the difference between your capital proceeds and the cost base of your CGT asset (shares) for example, if you sell an asset for more than you paid for it, the difference is your capital gain. You make a capital loss if your reduced cost base of your CGT asset is greater than your capital proceeds. Capital proceeds is the term used to describe the amount of money or the value of any property you received or are entitled to receive as a result of a CGT event happening. As you are transferring an interest in your shares for no consideration you are taken to have disposed of the 50% interest in your shares at their market value on the date of transfer. Whilst we appreciate your circumstances, the Commissioner does not have any discretion to provide exceptions or exemptions for transferring an asset to a spouse, except in the circumstances of a marriage breakdown.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: You and your spouse own shares in Australian companies that are held in joint names. | You and your spouse will transfer the shares into individual names in equal proportion. | You will make a capital gain as a result of the transfer.