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When a relationship breaks down, shares are often divided between partners as part of a financial settlement. This article explains how to record a court-ordered or formal settlement share transfer in Sharesight.

Does CGT apply?

Under Australian tax law, share transfers resulting from a court order or formal separation agreement qualify for a CGT rollover — meaning no capital gain or loss is triggered at the time of transfer. The original cost base of the shares is simply carried over to the receiving partner.

This rollover only applies when the transfer is made under a formal legal arrangement. Informal agreements between separating partners (e.g. a verbal agreement without a court order or binding financial agreement) may not qualify. Confirm with a family law or tax advisor before recording the transfer.

No original cost base? If the receiving partner cannot determine the original purchase price of the shares (e.g. records were lost or not shared), they will need to use a cost base of $0. This means any future capital gain will be calculated from zero and will be fully taxable. See the section below for how to record this.

How to record the transfer in Sharesight

Step 1 — Record the transfer out of the sender's portfolio

1. Open the sender's portfolio and navigate to the holding.
2. Go to Trades & income > Add trade or adjustment.
3. Trade type: Sell
4. Trade date: The date specified in the court order or settlement agreement.
5. Unit/price: The average cost base per share — not market value. This ensures no capital gain is recorded on the sender's side.
6. Quantity: The number of shares being transferred.
7. Click Add.

Why not market value? Because this is a CGT rollover, the "sale" is recorded at cost rather than market value. This produces a $0 capital gain on the sender's return, which is the correct treatment for a court-ordered transfer.

Step 2 — Record the shares in the recipient's portfolio

1. Open the recipient's portfolio. If they don't already hold the stock, click Add investments, search for it by ticker code and add it.
2. Trade type: Opening balance
3. Opening balance date: The same transfer date as Step 1.
4. Total cost base: Set the total cost base to equal the sell value from Step 1 — this carries over the original cost base to the recipient.
5. Quantity: The number of shares received.
6. Click Add.

If the original cost base is not known

If the recipient does not have access to the original purchase price — for example, records were not provided during the settlement — they will need to record a $0 cost base. This means the full sale proceeds will be treated as a capital gain when the shares are eventually sold.

1. Follow the same steps above for the recipient's portfolio.
2. In Step 6, set the total cost base to $0 instead of the original purchase price.

It is worth attempting to obtain the original trade records from the share registry, broker, or the Australian Tax Office before defaulting to $0. A tax advisor may also be able to help reconstruct the cost base.

Further reading

• [ATO — Relationship breakdown and capital gains tax

](https://www.ato.gov.au/Individuals/Capital-gains-tax/Relationship-breakdown-and-capital-gains-tax/)

Disclaimer

The guide above is a suggestion on how to handle share transfers in Sharesight and is not financial, legal, or tax advice. Divorce and separation settlements can be complex, and the tax treatment depends on the specific terms of your agreement. We strongly advise you to consult a family law advisor and a tax accountant before recording any transfers.