Private ruling: Valuation of shares
Date of advice: 17 August 2018
Published: October 2018
Ruling period: Year ended 30 June 2017
Date scheme commenced: 1 July 2016

Ruling: Q1: Will the Commissioner provide a valuation as to the market value of shares in a Company in Country A as at 20XX for the purposes of Section 855-45(2) of the ITAA 1997? | A1: Yes

Relevant facts and circumstances: In 20XX you incorporated a Company in Country A with you as sole director and shareholder to establish a business in Country A. In 20XX the Company changed its name. In 20XX the total shares held in the Company were valued in Country A by a firm in that country. Using the same valuation methodology as the firm who completed the previous valuation in Country A , a different firm also valued the total shares held in the Company at the same amount. Following an extended period where you were living and working overseas, you became a resident of Australia for taxation purposes in 20XX. In 20XX your authorised representative at that time, requested us to refer to an external valuer in order for the shares held in the Company to be valued. In 20XX we advised your authorised representative that our internal review completed by our valuations area determined the need for an external valuation. Your authorised representative advised that they would be happy for the external valuation to be completed subject to the quote received. In 20XX your authorised representative confirmed that they had accepted the quote for the valuation. You have provided various documents and additional information to assist the valuer in the determination of the market valuation of the shares. The valuer has specified the information they used and relied upon, without independent valuation, in the valuation report.

Relevant legislative provisions: Division 359 of Schedule 1 to the Taxation Administration Act 1953

Reasons for decision: Summary: The Commissioner has provided a valuation for the market value of shares in a Company in Country A for the purposes of Section 855-45(2) of the ITAA 1997, and is attached herein. | Detailed Reasoning - Detailed reasoning: Subsection 359-40(1) of Schedule 1 to the Taxation Administration Act 1953 (TAA) provides that if making a private ruling would require determining the value of any thing, the Commissioner may refer the valuation to a valuer. Subsection 359-40(1) of Schedule 1 to the TAA also provides that the Commissioner may request further information. Accordingly, the first element of the cost base and reduced cost base of your assets is their market value at the time you became a resident of Australia for taxation purposes, in accordance with section 855-45 of the Income Tax Assessment Act 1997 .