Hi Team I have an interesting situation that I hope someone else has come across to provide some insight. Problem I'm involved in a JV in which we have a Property Pty Ltd with 1 director and shareholder who has provided the servicing for the project and owns the properties. There is a second Capital Pty Ltd that has lent the cash for the project to the Property Pty Ltd. The profit from the project is owed to the Capital Pty Ltd as interest on the loan, to be repaid when the properties are sold and the project is finished (ie the final profit/loss outcome will be shown on the Capital Pty Ltd balance sheet). We own the property with finance and are ready to construct. Current LVR is about 43% as subdivision has occurred and titles are issued. Unfortunately the Director/Shareholder of Property Pty Ltd has lost their job and can no longer show servicing ability. Action We want to swap them out as a Director and Shareholder to bring someone else in who will have loan servicing ability. This on the surface looks to trigger a CGT event for the existing shareholder, as the subdivision has been finalised and equity has been added. If this is the case, we could look to remove the existing person as a Director, keep them as a shareholder and add the new person as Director and shareholder. Perspective We're not entirely certain that a CGT event will be triggered, as the commercial arrangement is that the servicing Pty Ltd owes the full profit to the investors, therefore there is an offsetting liability hence there is no profit for the company. It's an SPV so the "profit" for the company would be the capital gains, but there is an equal offsetting liability for the SPV to pay the profit to the investors therefore the tax implications go back to the investors. The challenge with showing this on the balance sheet is that the exact profit won't be known until all properties are sold. Does anyone have a perspective on how this could be managed from an accounting view? The other option is to keep the existing person as a shareholder and add the new person as a Director and shareholder. We would then need a lender that is happy for the existing shareholder to stay there (potentially securing a guarantee from both). Has anyone done something like this before? ie Had a company with one Director/shareholder (who has servicing) and another shareholder who doesn't. Any thoughts and insights are much appreciated. Kind regards, Tom.