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WilliamHu(Champion)Champion
25 Apr 2021

Hi,

I understand that a capital gain made by a company or trust that qualifies for the 15-year CGT asset exemption may be distributed to a CGT concession stakeholder of the company or trust as a non-assessable amount certain conditions are satisfied.

The distribution of this non-assessable amount by a company is not a dividend (s. 152-125(3)) but does not erode the cost base of the shareholder’s shares in the company (i.e. CGT event G1 does not apply) (s. 104-135(1A)).

So what is the journal entry when the company distributes the non-assessable amount to CGT concession shareholders. For example, the non-assessable amount is $10,000, should I record it as DR retained earning 10,000, CR cash 10,000?

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3,043 views
1 replies

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Most helpful replyATO Certified Response

AriATO(Community Support)Community Support
ATO Certified Response28 Apr 2021

Hi @WilliamHu

Yes any exempt amount distributed is non-assessable to the CGT concession stakeholder.

We don't have information about how you'd report this for accounting/bookkeeping purposes. If you visit your software providers site they generally have their own forums where you can sought assistance about journal entries.

Ari

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Most helpful replyATO Certified Response

AriATO(Community Support)Community Support
ATO Certified Response28 Apr 2021

Hi @WilliamHu

Yes any exempt amount distributed is non-assessable to the CGT concession stakeholder.

We don't have information about how you'd report this for accounting/bookkeeping purposes. If you visit your software providers site they generally have their own forums where you can sought assistance about journal entries.

Ari

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Journal Entry for Distribution to CGT concession shareholders - SBE15-year CGT asset exemption | ATO Community