ATO Interpretative Decision

ATO ID 2002/796 (Withdrawn)

Income Tax

Capital Gains Tax: sets of Personal Use Assets - Floor Tiles
FOI 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.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

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.

(Note: * an asterisked term is defined in the Dictionary starting at section 995-1 of the ITAA 1997)

Date of decision: 19 June 2002

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)

Related ATO Interpretative Decisions
ATO ID 2002/795

Keywords
Capital gains tax
Personal use assets
CGT cost base

Business Line: Centres of Expertise Capital Gains Tax

Date of publication: 22 August 2002

ISSN: 1445-2782

history

	Date:	Version:
	19 June 2002	Original statement
You are here	12 March 2010	Archived

Copyright notice

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).