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ATO Interpretative Decision

ATO ID 2003/47

Capital Gains Tax

Capital Gains Tax: CGT event - poker machine entitlement acquired by a NSW registered club
FOI status: may be released

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CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Did a CGT event happen under Division 104 of the Income Tax Assessment Act 1997 (ITAA 1997) when a NSW registered club acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(b) of the Gaming Machines Act 2001 (NSW)?

Decision

No. There was no CGT event under Division 104 of the ITAA 1997 when the registered club acquired the initial allocation of a poker machine entitlement, under paragraph 15(1)(b) of the Gaming Machines Act.

Facts

Prior to the commencement of the Gaming Machines Act, registered clubs in NSW were authorised to keep poker machines on their premises under the Registered Clubs Act 1976 (NSW). On the commencement of the Gaming Machines Act, an initial allocation of poker machine entitlements was made under paragraph 15(1)(b) of that Act. One poker machine entitlement was allocated for each approved poker machine that comprised the frozen number of approved poker machines for each registered club as determined by the Liquor Administration Board. Furthermore, the savings provisions in Schedule 1 of the Gaming Machines Act carried over the existing gaming machine approvals and authorisations, and existing gaming-related licences.

Reasons for Decision

Legal rights fall within the definition of 'CGT asset' at subsection 108-5(1) of the ITAA 1997. The rights pertaining to each approved poker machine, kept on the premises of a registered club, for which a poker machine entitlement was allocated, were effectively carried over from the Registered Clubs Act to the Gaming Machines Act. This was facilitated by paragraph 15(1)(b) and the savings provisions in Schedule 1 of the later statute.

Date of decision:  27 November 2000

Year of income:  Year ended 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
   Division 104
   subsection 108-5(1)

Gaming Machines Act 2001 (NSW)
   paragraph 15(1)(b)

Registered Clubs Act 1976 (NSW)
   the Act

Related ATO Interpretative Decisions
ATO ID 2002/785

Keywords
Amusement & gambling equipment
Capital gains tax
CGT assets
CGT events

Business Line:  Office of the Chief Tax Counsel

Date of publication:  28 February 2003

ISSN: 1445-2782

history
  Date: Version:
You are here 27 November 2000 Original statement
  30 April 2010 Archived

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