The shares are held in an informal trust with a child as beneficiary and an adult as the trustee in a CommSec account e.g. John Smith (Adam Smith A/C) (John Smith being the adult and Adam Smith being the child). The taxes for these share have been declared on the Child's tax returns and all income has been transferred to the child (child is beneficiary owner). So, should an Off Market Transfer be used to transfer the shares to the child (who is now 18) or a Change of Ownership (for no tax consequences)? Some sources online state Change of Ownership whereas Example 2 from ATO's "Children's share investments" page [ https://www.ato.gov.au/Individuals/Investments-and-assets/In-detail/Children-and-under-18s/Children-s-share-investments/ ] indicates that an Off market Transfer should be used: "Sara buys shares for her child, Michael, with money given to him for his birthday. Sara holds the shares for the benefit of Michael with the share broker until he turns 18. No formal trust deed has been created. Sara quotes Michael's TFN when she buys the shares. All dividends have been reinvested through a dividend reinvestment plan. The dividends are declared on Michael's tax returns. When Michael turns 18 years old, the shares will be transferred to him though an off-market transfer. As he remains the beneficial owner of the shares, there will be no capital gain or loss for either Sara or Michael on the transfer."
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