Draft Taxation Determination

TD 1999/D83

Income tax: capital gains: if marriage breakdown roll-over applies to a transfer of a CGT asset between spouses, what expenses of the transferor become the first element of the transferee's cost base of the asset under paragraph 126-5(5)(a) of the Income Tax Assessment Act 1997?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 1999/57.

FOI status:

Not previously released in draft form


Draft Taxation Determinations (DTDs) present the preliminary, though considered, views of the Australian Taxation Office. DTDs should not be relied on; only final Taxation Determinations represent authoritative statements by the Australian Taxation Office.

1. Expenditure incurred by a transferor arising from a marriage breakdown property settlement can be included in the first element of the transferee's cost base to the extent of the costs of transfer (conveyancing fees, stamp duty, etc).

2. The transferor's general legal costs of the marriage breakdown property settlement do not satisfy the cost base rules in Division 110 of the Income Tax Assessment Act 1997 (ITAA 1997).

Note 1

3. The transferor's costs of transfer that satisfy the cost base rules in Division 110 of the ITAA 1997 must be apportioned on a reasonable basis over all CGT assets involved in the property settlement, namely, all CGT assets transferred and all CGT assets retained by the transferor.

Note 2

4. Under subsection 126-5(5) of the ITAA 1997, if a CGT asset is transferred between spouses because of a court order under the Family Law Act 1975, the first element of the asset's cost base in the hands of the transferee is the asset's cost base in the hands of the transferor at the time the transferee acquired it. The first element of the asset's reduced cost base (if applicable) is calculated similarly.

Your comments

5. We invite you to comment on this Draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period.

Comments by Date: 15 September 1999
Contact officer details have been removed following publication of the final ruling.

Commissioner of Taxation
18 August 1999


ATO references:
NO 99/19509-6
BO CGT marriage breakdown summit 1999

ISSN 1038 - 8982

Subject References:
CGT asset
CGT event
cost base
first element
marriage breakdown
property settlement
reduced cost base

Legislative References:
ITAA 1997 126-5(5)
ITAA 1997 126-5(5)a
ITAA 1997 Div 110