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Off-market Transfer - Capital gain?

Discussion in 'Accounting, Tax & Legal' started by OLI, 18th Feb, 2008.

  1. OLI

    OLI Well-Known Member

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    15th Aug, 2005
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    When you complete an off-market transfer to move managed funds or shares over to a Margin Lender, is this classed as a 'sale' with Capital Gains tax payable?
     
  2. samaka

    samaka Well-Known Member

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    Sydney
    Why do you have to transfer ownership in the first place? If you transfer it for the same price you purchased at then there is no capital gains.
     
  3. Rob G.

    Rob G. Well-Known Member

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    Melbourne, VIC
    Are you lodging the shares with the lender as security for a loan ?

    Or are you "paying out" your loan with shares - e.g. exercising a put option ?

    Cheers,

    Rob
     
  4. OLI

    OLI Well-Known Member

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    Yes, it would be shares I already own but would lodge them with the lender as additional security to lower the LVR of an existing margin loan.

    I'm guessing there would be no capital gains calculation required even though the 'ownership' has changed to the lender because they are still your shares?
     
    Last edited by a moderator: 19th Feb, 2008
  5. Rob G.

    Rob G. Well-Known Member

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    Location:
    Melbourne, VIC
    That is what normally happens.

    You remain the "beneficial owner".

    It won't hurt to check exact details with the ATO since the as the advice is free - if you can wait long enough on the phone !

    Cheers,

    Rob
     
  6. Rob G.

    Rob G. Well-Known Member

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    Location:
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    Given some seemingly dubious loan contracts at the moment - get some legal advice first !!

    It costs, but could save you in the long run.

    Cheers,

    Rob
     
  7. AsxBroker

    AsxBroker Well-Known Member

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    Location:
    Sydney, NSW
    Hi Oli,

    The term you want to throw around is "No Change Beneficial Owner" as you want to lodge the stocks/managed funds as security.

    Your margin lender should be able to accept this lodgement of security against your loan. You should call them and ask how to do this.

    If you have a financial planner or stockbroker you deal with ask them.

    Cheers,

    Dan

    PS Before making doing things you should always consult your AFSL holder of choice to ensure you are adequately covered in Australia.