ATO Interpretative Decision

ATO ID 2003/46

Capital Gains Tax

Capital Gains Tax: CGT event - poker machine entitlement acquired by a NSW hotelier
FOI status: may be released

This ATO ID has been amended by the inclusion of a note to cover the identical situation with regard to registered clubs that was dealt with in withdrawn ATO ID 2003/47.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Did a CGT event happen under Division 104 of the Income Tax Assessment Act 1997 (ITAA 1997) when a NSW hotelier acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(a) of the Gaming Machines Act 2001 (NSW)?

Decision

No. There was no CGT event under Division 104 of the ITAA 1997 when the hotelier acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(a) of the Gaming Machines Act 2001 (NSW).

Facts

Prior to the commencement of the Gaming Machines Act 2001 (NSW) (Gaming Machines Act), hoteliers in NSW were authorised to hold poker machines under the Liquor Act 1982 (NSW) (Liquor Act). On the commencement of the Gaming Machines Act, an initial allocation of poker machine entitlements was made under paragraph 15(1)(a) of that Act. One poker machine entitlement was allocated for each approved poker machine that comprised the frozen number of approved poker machines for a hotel as determined by the Liquor Administration Board. Furthermore, the savings provisions in Schedule 1 of the Gaming Machines Act carried over existing gaming machine approvals and authorisations, and existing gaming-related licences.

Reasons for Decision

Legal rights fall within the definition of 'CGT asset' at subsection 108-5(1) of the ITAA 1997. The rights pertaining to each approved poker machine, kept in a hotel, for which a poker machine entitlement was allocated, were effectively carried over from the Liquor Act to the Gaming Machines Act. This was facilitated by paragraph 15(1)(a) and the savings provisions in Schedule 1 of the latter statute.

Note: the above analysis also applies where a NSW registered club acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(b) of the Gaming Machines Act.

Note: Paragraphs 15(1)(a) and 15(1)(b) of the Gaming Machine Act have been repealed by the Clubs, Liquor and Gaming Machines Legislation Amendment Act 2011.

This repeal does not have any impact on the outcome of the ATO ID to the extent as how the CGT provisions of the ITAA 1997 operate in relation to the initial allocation of poker machine entitlements under the Gaming Machine Act.

Amendment History

Date of Amendment	Part	Comment
8 July 2016	Issue, Decision, Facts,	Minor punctuation amendments
	Reason for Decision	Minor punctuation amendments. Add Note regarding paragraphs of the Gaming Machine Act 2001 (NSW) which have been repealed

Date of decision: 27 November 2002

Year of income: Year ended 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
Division 104
subsection 108-5(1)

Gaming Machines Act 2001 (NSW)
paragraph 15(1)(a)

Liquor Act 1982 (NSW)
the Act

Keywords
Amusement & gambling equipment
Capital gains tax
CGT assets
CGT events

Siebel/TDMS Reference Number: CRS80252; 1-7T9F4XS

Business Line: Private Groups and High Wealth Individuals

Date of publication: 28 February 2003

ISSN: 1445-2782

history

	Date:	Version:
	27 November 2002	Original statement
You are here	8 July 2016	Updated statement

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