There are limited circumstances where a building or structure constructed on land you acquired on or after 20 September 1985 is considered to be a separate CGT asset from the land. These circumstances occur where certain balancing adjustment provisions apply to the building or structure. For example, a timber mill building is subject to a balancing charge adjustment if it is sold or destroyed, so it is treated as a separate asset from the land.
Land you acquire on or after 20 September 1985 adjacent to land you acquired before that date is taken to be a separate CGT asset even if it and the adjacent land are merged into one title.
Example: Adjacent land
On 1 April 1984 Dani bought a block of land. On 1 June 2000 she bought another block adjacent to the first one. Dani amalgamated the titles to the two blocks into one title.
The second block is treated as a separate CGT asset acquired on or after 20 September 1985 and is therefore subject to capital gains tax.
End of example