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If a parent company transfers assets to a wholly owned subsidiary, will it need to pay CGT?

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Newbie

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I'm considering setting up a company; however, I'm also thinking ahead into the future when I want to set up a dual-company structure. If i set up a holding company today that owns CGT assets (e.g. real estate) and I eventually decide to set up another company as a subsidiary wholly owned by the parent company, will I need to pay CGT if I transfer the CGT asset from the holding company to the subsidiary?

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ATO Certified

Moderator

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Hi @tsla,

 

Have a look at TR 2004/11 specifically paras 8 and 9 which answer your question.

 

Dealings that are solely between members of the same consolidated group (intra-group dealings) will not result in ordinary or statutory income or a deduction to the group’s head company.

 

An example of an intra-group dealing is the transfer of a capital gains tax (CGT) asset from one group member to another. This transfer is not treated for income tax purposes as a disposal or acquisition in the hands of the head company.

 

Hope this helps. Thanks, NateH

 

2 REPLIES 2
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Moderator

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Hi @tsla,

 

We are going to check on this and get back to you with a response soon.

 

Thanks, NateH

Highlighted

Best answer

ATO Certified

Moderator

Replies 0

Hi @tsla,

 

Have a look at TR 2004/11 specifically paras 8 and 9 which answer your question.

 

Dealings that are solely between members of the same consolidated group (intra-group dealings) will not result in ordinary or statutory income or a deduction to the group’s head company.

 

An example of an intra-group dealing is the transfer of a capital gains tax (CGT) asset from one group member to another. This transfer is not treated for income tax purposes as a disposal or acquisition in the hands of the head company.

 

Hope this helps. Thanks, NateH