Draft Taxation Determination

TD 1999/D87

Income tax: capital gains: is the expression 'a State law, Territory law or foreign law relating to de facto marriage breakdowns' in paragraphs 126-5(1)(c) and 126-15(1)(c) of the Income Tax Assessment Act 1997 restricted to State, Territory or foreign legislation?

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by TD 1999/61.

FOI status:

Not previously released in draft form

Preamble

1. Yes.

2. The reference to 'a State law, Territory law or foreign law' in paragraphs 126-5(1)(c) and 126-15 (1)(c) of the Income Tax Assessment Act 1997 is confined to statutory law of a State, Territory or foreign country and does not extend to the law generally in a State, Territory or foreign country.

3. The effect of this is that a CGT event which happens because of a court order relating to de facto marriage breakdown, only qualifies for roll-over if it happens because of a court order made under the statutory law of a State, Territory or foreign country relating to de facto marriage breakdowns.

4. Roll-over is, therefore, only available in those States, Territories and foreign countries that have made specific legislative provision for de facto marriage breakdowns.

5. This construction is supported by the fact that paragraphs 126-5(1)(c) and 126-15 (1)(c) refer to 'a' State law, Territory law or foreign law and do not refer to 'the' law of a State, Territory or foreign country. Under subsection 995-1(1), except so far as a contrary intention appears, 'State law' means 'a law of a State', 'Territory law' means 'a law of a Territory' and 'foreign law' means 'a law of a foreign country'. It is also supported by the explanatory memorandum to the Taxation Laws Amendment Bill (No 2) 1992 which states that roll-over will extend to 'the transfer of assets on the breakdown of de facto marriages where a State, Territory or foreign country has legislated to allow the court to order such a transfer'.

Your comments

6. We invite you to comment on this Draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period.

Commissioner of Taxation
18 August 1999

References

ATO references:
NO 99/19509-6
BO CGT marriage breakdown summit 1999

Subject References:
de facto marriage breakdown
foreign law
roll-over
State law
Territory law

Legislative References:
ITAA 1997 126-5(1)(c)
ITAA 1997 126-15(1)(c)
ITAA 1997 995-1