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CGT and separation of shares (with no formal agreement)

Newbie

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Replies 1

Hey ATO Community, 

 

My Ex-Partner and I are separated and we have shares together (like stock market shares that are tradeable).  Originally when it was bought under his name solely.  I wish to complete our separation and that includes dividing up our shares equally (as we paid equally for them). 

 

So the facts are as follows:

-We do not have a formal binding legal agreement/court order in place

-We have an informal agreement

-They have been solely under his name and soon half of them will be transferred to me solely

-I will not be selling them for at least two years 

 

So, my questions are as follows:

-Will a CGT event trigger for me when they are transferred to me?

-If so, what kind of CGT event?

-If a CGT event does trigger for me, at what rate would it be?  At the individual income tax rates? 

 

I am not worried about CGT event for him.  I am just trying to understand if I will have to pay any CGT when these are transferred to me.

 

Kind regards,

 

ANJD

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Certified Response

ATO Community Support

Replies 0

Hi @ANJD,

 

A CGT event does not occur for you during the acquisition of assets/shares.

 

A CGT event for shares happens when you dispose of those shares, so when you sell them or they are deemed worthless.

 

When you sell the shares, you will trigger a CGT event as a Disposal (A) event. If you sell after holding the shares for more than 12 months, you may be eligible for the discount method, reducing your tax payable.

 

For individuals, your CGT is charged at your marginal rate.

 

You can read about types of CGT events, the discount method of calculating your capital gain, and individual income tax rates on our website.

1 REPLY 1

Most helpful response

ATO Certified Response

ATO Community Support

Replies 0

Hi @ANJD,

 

A CGT event does not occur for you during the acquisition of assets/shares.

 

A CGT event for shares happens when you dispose of those shares, so when you sell them or they are deemed worthless.

 

When you sell the shares, you will trigger a CGT event as a Disposal (A) event. If you sell after holding the shares for more than 12 months, you may be eligible for the discount method, reducing your tax payable.

 

For individuals, your CGT is charged at your marginal rate.

 

You can read about types of CGT events, the discount method of calculating your capital gain, and individual income tax rates on our website.