Private ruling: CGT - transfer of shares
Date of advice: 10 March 2025
Published: 19 May 2025
Ruling period: For the income year ending DDMMYYYY | For the income year ending DDMMYYYY
Date scheme commenced: DDMMYYYY

Ruling: Q1: Will capital gains tax (CGT) event A1 occur when you transfer the shares to your child? | A1: No. CGT event A1 happens when you dispose of a CGT asset. You dispose of a CGT asset if a change of ownership occurs from you to another entity. However, as XXXX has always been the sole beneficial owner of the shares, CGT event A1 will not occur and there will be no capital gain or loss on the transfer.

Relevant facts and circumstances: You are the parent of XXXX (your child). In YYYY, your child's late grandparents provided funds to invest in shares in an Australian company to assist in financing the future medical expenses relating to their long term medical condition. The shares were purchased in your legal name however you were acting in the capacity as trustee for your child due to their young age. All dividend income has been reinvested through a dividend reinvestment plan. All dividend income and any capital gains made on the sale of shares has always been declared on your child's income tax returns. Through an off-market transaction to be undertaken during the ruling periods, you will transfer the legal title of the shares into your child's name now that they are an adult. You will not receive any consideration on the transfer of the shares to your child.

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