Private ruling: Capital gains and losses
Published: February 2012
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Question and answer | Can you transfer shares to your father without incurring a capital loss? | No

Relevant facts and circumstances: You purchased shares which has lost about 90% of their value of the last 2 years. You have not sold these shares yet. The shares were acquired after 20 September 1985. You intend to transfer the share to your father. You will make a capital loss on your shares

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

Reasons for decision: Summary: A taxpayer will make a capital gain or loss if a CGT event happens. Where a CGT event involves a contract, the time of the event is usually when the contract is executed. | Detailed Reasoning - CGT event A1: Section 104-10 of the Income Tax Assessment Act 1997 defines CGT event A1 as the disposal of an asset. CGT event A1 occurs when disposal contract is entered into or, if there is none, it is when you stop being asset's owner. In the case of transferring shares, you CGT event A1 will occur when you no long are the owner of those shares, be it through the sale or transfer of your shares to another individual or entity. There are a number of CGT exemptions and rollovers available to taxpayers however, none apply to transferring shares between individuals.

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.