ATO Interpretative Decision
ATO ID 2002/796 (Withdrawn)
Income Tax
Capital Gains Tax: sets of Personal Use Assets - Floor TilesFOI status: may be released
-
This ATOID 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.
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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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
Are boxes of matching floor tiles a set of personal use assets for the purposes of section 108-25 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
No. The boxes of matching floor tiles are not a set of personal use assets for the purposes of section 108-25 of the ITAA 1997. The tiles would not ordinarily be sold as a set and the taxpayer did not dispose of them in separate transactions in order to obtain the exemption in section 118-10 of the ITAA 1997.
Facts
The taxpayer purchased a large number of marble floor tiles at an auction. The tiles were purchased for use in a property that the taxpayer owned and resided in. The taxpayer lived in the property for a number of years before leaving it vacant. The tiles were stored at the property during that time.
None of the tiles were actually used to tile the taxpayer's property. They were eventually sold to a number of different purchasers during the 2000 income year, some 7 years after the taxpayer acquired them.
Reasons for Decision
A capital gain from a personal use asset, or part of the asset, is disregarded if the first element of the asset's cost base is $10,000 or less (subsection 118-10(3) of the ITAA 1997).
Subsection 108-25(2) of the ITAA 1997 provides that, if the conditions in subsection 108-25(1) of the ITAA 1997 are met, a set of personal use assets is taken to be a single personal use asset and each disposal is a disposal of part of the asset. This is relevant in determining whether the $10,000 exemption threshold in subsection 118-10(3) of the ITAA 1997 has been exceeded.
The conditions in subsection 108-25(1) of the ITAA 1997 are:
- (a)
- you own *personal use assets that are a set; and
- (b)
- they would ordinarily be *disposed of as a set; and
- (c)
- you dispose of them in one or more transactions for the purpose of trying to obtain the exemption in section 118-10.'
The tiles are considered to be personal use assets and were sold in more than one transaction. However, the tiles would not ordinarily be disposed of as a set and the taxpayer did not dispose of them in separate transactions for the purpose of obtaining the exemption. Accordingly, the conditions in subsection 108-25(1) of the ITAA 1997 are not satisfied and the exemption in subsection 118-10(3) of the ITAA 1997 applies.
Year of income: Year ended 30 June 2000
Legislative References:
Income Tax Assessment Act 1997
section 108-25
subsection 108-25(1)
subsection 108-25(2)
section 118-10
subsection 118-10(3)
ATO ID 2002/795
Keywords
Capital gains tax
Personal use assets
CGT cost base
ISSN: 1445-2782
| Date: | Version: | |
| 19 June 2002 | Original statement | |
| You are here | 12 March 2010 | Archived |