Off-market Transfer - Capital gain?

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?

 

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.

 

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

 

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?

 

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

 

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

 

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.