ATO Interpretative Decision
ATO ID 2002/809
Income Tax
Capital gains tax: Unincorporated association - disposal of assetFOI status: may be released
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This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does an unincorporated association (or do the individual members) make the capital gain (or capital loss) as a result of CGT event A1 occurring under section 104-10 of the Income Tax Assessment Act 1997 ('ITAA 1997') upon disposal of a CGT asset held by the unincorporated association?
Decision
The unincorporated association (and not the individual members) makes the capital gain (or capital loss) as a result of CGT event A1 in section 104-10 of the ITAA 1997 arising from the disposal of a CGT asset held by the unincorporated association.
Facts
An unincorporated club disposes of a CGT asset.
The club is not an exempt entity under Division 50 of the ITAA 1997.
Reasons for Decision
An unincorporated association is an entity and a company for income tax purposes (sections 960-100, 995-1 of the ITAA 1997). The members, in their relationship under the association's constitution, constitute the unincorporated association.
The assets held in that relationship represent the assets held by the unincorporated association. Therefore, for the purposes of CGT event A1 under section 104-10 of the ITAA 1997, the unincorporated association is an entity that owns the CGT asset and on its disposal is the entity that makes any resulting capital gain or capital loss.
Although the individual members of the unincorporated association jointly own the association's assets at general law, it is the ownership of those assets by the unincorporated entity as a company under tax law that is relevant for the purposes of CGT event A1. Therefore capital gains (or capital losses) are not made by the individual members from the disposal of an asset held by the unincorporated association. The capital gains (or capital losses) are made by the unincorporated association itself.
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 21 November 2014 | Issue, Decision and Reason for Decision | Updated for clarity and amended spelling mistake and grammar. |
Year of income: Year ending 30 June 2002
Legislative References:
Income Tax Assessment Act 1997
section 104-10
section 960-100
section 995-1
ATO ID 2002/808
Keywords
Association income
Capital gains
Capital gains tax
CGT event A1 - disposal of CGT asset
Companies
Non profit companies
Date reviewed: 17 March 2017
ISSN: 1445-2782
| Date: | Version: | |
| 27 May 2002 | Original statement | |
| You are here | 21 November 2014 | Updated statement |