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Edited version of private ruling
Authorisation Number: 1011572713831
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Ruling
Subject: Capital gains tax (CGT)- disposal of a CGT asset
Is the sale of web sites a CGT event?
Yes.
Relevant facts
You operate a number of websites under a banner.
You sold some of the websites
The web sites generated income for you.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 108-5
Reasons for decision
Summary
The sale of some of your websites is a CGT event.
Detailed reasoning
A capital gain or a capital loss is made if and only if a CGT event happens to a CGT asset. A capital gain will be realised where the capital proceeds are greater than the cost base and a capital loss will be realised where the reduced cost base is greater than the capital proceeds. The web sites disposed of are CGT assets.
The most common CGT event happens when a taxpayer disposes of an asset to someone else; the disposal of a CGT asset causes a CGT event A1 to happen. Disposal of an asset happens when a change of ownership occurs from the taxpayer to another entity. The time of the event is when the contract for the disposal is entered into or if there is no contract when the change of ownership occurs.
The sale of your web sites triggers CGT event A1 and as a result, a capital gain or capital loss will be realised.
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