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ATO Interpretative Decision

ATO ID 2002/257 (Withdrawn)

Income Tax

Capital gains tax - change from an incorporated association to a company
FOI status: may be released
  • This ATOID is withdrawn as it is a simple restatement of the law and does not contain an interpretative decision.
    This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Does a CGT event under Division 104 of the Income Tax Assessment Act 1997 (ITAA 1997) happen when an incorporated association under the ACT Associations Incorporations Act 1991 (ACT) changes registration to a company under the Corporations Act 2001 (Corporations Law)?

Decision

No. There is no CGT event under Division 104 of the ITAA 1997 that happens on the change in registration from an ACT incorporated association to a company under the Corporations Law.

Facts

An ACT incorporated association is to convert to a company under the Corporations Law.

Reasons for Decision

Paragraph 601BM(1)(a) of Part 5B.1 of the Corporations Law 2001 provides that registration under this Part does not create a new legal entity. As such, there is no CGT event under Division 104 of the ITAA 1997 that happens to an association incorporated under the ACT on the change in registration to a company under the Corporations Law.

Date of decision:  18 October 2001

Year of income:  Year ending 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
   Part 3-1
   Section 104-5

ACT Associations Incorporation Act 1991
   the Act

Corporations Act 2001
   Part 5B.1
   Subsection 601BA(1)
   Paragraph 601BM(1)(a)

Related ATO Interpretative Decisions
ATO ID 2002/816

Keywords
Capital gains
Capital gains tax
Capital Gains Tax CoE
CGT events
Pre-CGT asset
Incorporation

Business Line:  Private Groups and High Wealth Individuals

Date of publication:  22 March 2002

ISSN: 1445-2782

history
  Date: Version:
  18 October 2001 Original statement
You are here 12 March 2010 Archived

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