CGT Determination Number 45

TD 45

Capital Gains: What are the CGT consequences of the acquisition by one of two tenants in common of the interest of the other tenant in common?

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FOI status:

may be releasedFOI number: I 1019390

1 Where a taxpayer, being a tenant in common of land, acquires the interest of the other tenant in common, the co-ownership ceases. The CGT consequences will depend on the date on which the taxpayer's interest as tenant in common was originally acquired.

2. Whilst the taxpayer now has full ownership of the land, it is derived from the acquisition of two interests viz. the taxpayer's original 50% interest plus the 50% interest acquired from the other tenant in common.

3. Where the taxpayer acquired his or her interest as tenant in common before 20 September 1985, 50% of his or her interest in the land is considered to be a pre-CGT asset. The 50% interest acquired from the other tenant in common after 19 September 1985 is a separate post-CGT asset. Its cost base generally includes the amount paid to acquire that interest. This treatment is analogous with the way subsection 160P(3) applies to the acquisition of adjacent land.

4. Where both interests are obtained separately post-CGT, the cost base of the land will generally include the sum of the separate considerations paid for each interest.

Commissioner of Taxation
5 March 1992

References

ATO references:
NO CGT Cell

ISSN 1037 - 1419

Subject References:
Tenants in common;
interest of other tenant

Legislative References:
160P(3)

TD 45 history
  Date: Version: Change:
  5 March 1992 Original ruling  
You are here 29 November 2006 Original ruling + note Repeal provision note
  3 May 2017 Withdrawn