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B37/1994 CHANGES TO DATE OF ACQUISTION FOR:
DATE OF ISSUE: 29 AUGUST 1994
CHANGES TO DATE OF ACQUISTION FOR:
1. UNLISTED SHARES LISTING ON THE STOCK EXCHANGE; AND
2. SHARES UPON TRANSFER BETWEEN MEMBERS OF A COUPLE.
The purpose of this instruction is to outline minor changes to the assessment of shares for service pension purposes.
The changes affect the income test treatment of shares currently assessed under the assessment rules for pre 19 August 1992 acquired shares under the circumstances described below.
The changes for shares are twofold.
1. The first affects private company shares listing on the stock exchange.
To date shares acquired prior to 19 August 1992 in a private company that subsequently lists on the stock exchange on or after 19/8/92 are assessed as new shares with a rate of return applied.
This policy has been under review, a decision now having been made to disregard the listing date and base the acquisition date upon the date the shares were originally acquired in the private company. This means that any shares in a private company that lists on the stock exchange on or after 19 August 1992 will continue to be assessed under the pre 19 August 1992 provisions if the private company shares were acquired before that date.
2. The second change involves a clarification of the rules relating to transfers of shares between a husband and wife. The General Orders set out specific policy for the treatment of shares transferred upon separation or death of one of a couple. Cases involving the transfer of shares other than on separation or death are also to have the same policy applied, that being, transfers between one partner of a couple to the other partner does not affect the date of acquistion of the shares transferred. Therefore if shares acquired prior to 19 August 1992 are transferred between partners, those shares will continue to be assessed under the old shares rules.
The General Orders are being updated and these changes will be reflected in its next update.
WHO WILL BE AFFECTED
The number of clients likely to be affected by these changes is not known but it is expected to be few. If clients, with shares transferred between partners or with shares in companies that have changed their status from unlisted to listed, come to notice, they should be checked to ensure the correct acquistion date is being used.
If Branch Officers have any queries related to this change, they should first contact their Branch Income Policy Officer. If further clarification is required, the Project Officer for shares, Tim Adams (phone number 06 289 6412) should be contacted.