Simple Mistake on Share Transfer

A taxpayer who thought he was making a simple and standard family transaction was caught for Capital Gains Tax.

A taxpayer, who owned some public company shares, asked the share registry to register the shares in joint names (with the spouse).  The change became obvious to the tax office when the dividends decreased the following year and the taxpayer tried to justify the transfer on the basis that the spouse really owned them jointly from the beginning.

Unfortunately, there was no real substance to the proposition and no hard evidence.  Accordingly, there was a disposal for Capital Gains Tax purposes and a small profit on the increase between the cost and the market value at the time of the transfer.

The taxpayer may have had a motive of saving tax by splitting future dividends, but made a basic mistake by not asking the tax adviser.

The safest assumption to make is that all transfers (of shares/property) need to be declared for Capital Gains tax purposes.

The next step is to calculate if there is a profit or loss and finally whether there may be exemptions (e.g. main residence, small business concessions).

 

Cristy Houghton

Embarketing, 48 Johnston Street, Wagga Wagga, NSW, 2650

Cristy's unique career has taken her from country NSW to the city lights of Clarendon Street South Melbourne and back again. With an early career in radio as a copywriter and creative strategist, she is now a Jill of all trades as a graphic designer, website builder, blog writer, video editor, social media manager, marketing strategist and more. 

In fact, give her any task and this chick will figure out how to do it! Go on, we dare you!

No, really, we DARE you!!

Cristy has won two Australian Commercial Radio Awards (ACRAs) for Best Ad and Best Sales Promotion, and even has an 'Employee of the Year' certificate with her name on it.

Cristy and her husband James have traveled extensively through Russia, China and South East Asia, and have two fur-babies, Sooty (cat) and Panda (puppy). Cristy loves drinking coffee, meeting people to drink coffee, coffee tasting and coffee flavoured cocktails. She also enjoys road trips, TED Talks and watching cat videos on youtube.