Announcements
The JobKeeper Payment scheme finished on 28 March 2021. Find out what this means for your business.

ATO Community

Ex-Partner and I are separating stock. Will I have to pay Capital Gains Tax?

Newbie

Views 215

Replies 5

Hey ATO Community, 

 

My Ex-Partner and I are separated and we have jointly have shares together.  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 will I have to pay Capital Gains Tax on the shares he transfers me?  If so, at what rate?  The individual income tax rates?

 

Kind regards,

 

Ashley

 

 

 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 1

Hi @ANJD,

 

Your ex-partner will need to pay CGT when he transfers your portion to you.  When you sell your portion a CGT event will occur for you and this will be reported on your income tax return in the year the event occurs.

 

To calculate your capital gain or loss you'll need to know the cost base.

 

I want to wish you all the very best.

5 REPLIES 5

Most helpful response

ATO Community Support

Replies 1

Hi @ANJD,

 

Your ex-partner will need to pay CGT when he transfers your portion to you.  When you sell your portion a CGT event will occur for you and this will be reported on your income tax return in the year the event occurs.

 

To calculate your capital gain or loss you'll need to know the cost base.

 

I want to wish you all the very best.

Newbie

Replies 0

Hey @CaroATO,

 

Thank you so much for the information.  Is that based on the assumption of being eligible for the rollover? Or is that based on being ineligible for it?

 

Kind regards,

 

Ashley

ATO Community Support

Replies 2

Hi @ANJD,

 

This is based on the ineligibility for a rollover, when the shares are part of trading stock.

 

When the shares aren't used for business and there is a court order, formal agreement or award, check out the eligibility criteria that needs to be met for a rollover to occur.

 

I hope this helps.

Newbie

Replies 1

Hey @CaroATO,

 

Thank you for all of this information.  So something I just wanted to check, a CGT event won't be triggered for me resulting in paying CGT, but it will occur for my ex-partner who will have CGT (or loss based on cost base and amount)?  

 

Cheers,

 

Ash

ATO Community Support

Replies 0

Hi @ANJD

 

A CGT event only happens to you when you dispose of a capital asset. This is why your ex-partner will have a CGT event, but not you.

 

For you, you'll incur a capital loss. You'll need to calculate your cost base to start with so you can report it on your return. You'll use this to offset any later capital gains you have.

 

Hope this helps! Smiley Happy