Private ruling: CGT - beneficial ownership
Date of advice: 7 September 2023
Published: 16 October 2023
Ruling period: For the income year ending 30 June 2024
Date scheme commenced: 1 July 2023

Ruling: Q1: Will the off-market transfer for a jointly owned investment (managed fund) into two separate accounts (split 50/50) result in a capital gains tax (CGT) event? | 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 a change of ownership does not occur if you stop being the legal owner of the asset but continue to be its beneficial owner. 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 of the investment.

Relevant facts and circumstances: Both you and your former spouse jointly own a managed fund investment portfolio. The fund is split across four managed investments. The account was opened on DD MM YYYY and the purchase price was $X. The current market value of the investment is approximately $X. Following your relationship breakdown, you now wish to divide the jointly owned investment equally into each of your own individual names in an off-market transfer so you can each make your own decisions on your respective share of the property investments. You and your former spouse remain the beneficial owners of the investment after the off-market transfer.

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