Draft Taxation Determination
TD 1999/D96
Income tax: capital gains: in what circumstances does the expression 'proceeds cannot be valued' in paragraph 116-30(2)(a) of the Income Tax Assessment Act 1997 (market value substitution rule) apply?
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Please note that the PDF version is the authorised version of this draft ruling.This document has been finalised by TD 1999/84.
FOI status:
Not previously released in draft formPreamble
Draft Taxation Determinations (DTDs) present the preliminary, though considered, views of the Australian Taxation Office. DTDs should not be relied on; only final Taxation Determinations represent authoritative statements by the Australian Taxation Office. |
1. The expression applies if capital proceeds cannot be valued at all. Situations where capital proceeds cannot be valued are likely to be rare. Paragraph 116-30(2)(a) of the Income Tax Assessment Act 1997 does not apply if valuing capital proceeds is merely difficult, costly or inconvenient.
2. As a matter of policy it is inappropriate to apply the market value substitution rule to deem the market value of an asset being sold to constitute the capital proceeds from a CGT event if it is at all possible to value the capital proceeds given. The substitution of market value should, therefore, be used in these circumstances only as a last resort.
Note
3. The above analysis also applies to expenditure that cannot be valued in paragraph 112-20(1)(b) of the cost base market value substitution rule.
Your comments
9. 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.
Comments by Date: | 24 September 1999 |
Contact officer details have been removed following publication of the final ruling. |
Commissioner of Taxation
25 August 1999
References
ATO references:
NO 99/11446-1
BO CGT disposal summit 1999; CPL99/81
Subject References:
asset
cannot be valued
capital gains
capital proceeds
CGT asset
CGT event
cost base
market value
market value substitution rule
valuation
value
Legislative References:
ITAA 1997 112-20(1)(b)
ITAA 1997 116-30(2)(a)
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