In accordance with a court order under the Family Law Act 1975 (Cth), Timothy transfers 100 shares in ABC Pty Ltd to his former wife, Jen. The shares were purchased in 2006 for $1,000, and the value of the shares on the date of transfer is $2,000. What are the CGT consequences of this transfer for Timothy and Jen?

Select one:

a. Timothy reports a net capital gain of $500 (applying the CGT general discount), and there are no CGT consequences for Jen.

b. The capital gain made by Timothy from the disposal is disregarded. The first element of the cost base of the shares in Jen's hands is $2,000.

c. Timothy reports a net capital gain of $500 (applying the CGT general discount). The first element of the cost base of the shares in Jen's hands is $2,000.

d. The capital gain made by Timothy from the disposal is disregarded. The first element of the cost base of the shares in Jen's hands is $1,000.