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ATO Interpretative Decision

ATO ID 2002/789 (Withdrawn)

Capital Gains Tax

Capital Gains Tax - Averaging
FOI status: may be released
  • This ATO ID is a straight application 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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Can a taxpayer apply capital gains tax (CGT) averaging under clause 2 of Schedule 7 to the Income Tax Rates Act 1986 (Rates Act) to the capital gain arising from a CGT event that happens after 21 September 1999, on a pro rata basis for the period of ownership of the asset before that date?

Decision

No. The taxpayer cannot apply CGT averaging to the capital gain on a pro rata basis as the Rates Act was amended so that the averaging rules ceased to apply for CGT events that occur after 21 September 1999.

Facts

The taxpayer bought an asset after 20 September 1985. The taxpayer disposed of the property after 11:45 (ACT time) on 21 September 1999 and made a capital gain. The taxpayer disposed of the asset after 11.45am (ACT time) on 21 September 1999. The taxpayer wants to have CGT averaging apply to the gain on a pro rata basis taking into account the period of ownership prior to 21 September 1999.

Reasons for Decision

The averaging concession was removed for CGT events occurring after 11.45am EST on 21 September 1999, and applies to assessments for the 1999/2000 and later years of income.

There is no provision which provides for the pro rata of averaging based on the period for which the asset was owned prior to 21 September 1999. Therefore, the taxpayer cannot apply the averaging rules to the sale of the asset, as the CGT event occurred after 21 September 1999.

Notation:
This ATO ID has been amended to clarify the time the taxpayer disposed of the asset.

Date of decision:  7 June 2002

Year of income:  Year ending 30 June 2002

Legislative References:
Income Tax Rates Act 1986
   Clause 2 of Schedule 7

Keywords
Capital gains tax
Abolition of CGT averaging

Business Line:  Centres of Expertise Capital Gains tax

Date of publication:  2 August 2002

ISSN: 1445-2782

history
  Date: Version:
  7 June 2002 Original statement
You are here 16 March 2007 Archived

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