Income tax: property development: if land is trading stock, do related interest costs, council rates and land taxes, form part of the cost price for trading stock valuation purposes?
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FOI status:may be releasedFOI number: I 1213013
|This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue.|
1. No. If land is acquired by a business as trading stock, interest, council rates and land tax incurred on and after the acquisition of the land do not form part of the cost price for the purposes of subsection 31(1) of the Income Tax Assessment Act 1936 (the Act). These costs are incurred in holding the land whether or not it is subject to any future development.
2. Provided the requirements of the Act are met, related interest, council rates and land tax are deductible in the year in which they are incurred.
Commissioner of Taxation
valuation of land as trading stock;
|30 July 1992||Original ruling|
|You are here||29 November 2006||Original ruling + note||Repeal provision note|