Draft Taxation Determination

TD 1999/D77

Income tax: capital gains: if a court order in the context of Subdivision 126-A of the Income Tax Assessment Act 1997 varies or sets aside an earlier order of the court, does the later court order operate retrospectively or prospectively?

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by TD 1999/51.

FOI status:

Not previously released in draft form

Preamble

1. The answer depends on the terms of the court order. In the absence of clear words to the contrary, a later court order should be given only prospective application.

2. If:

(a)

a CGT event involving an individual and their spouse happens because of a court order under the Family Law Act 1975;

(b)

roll-over is provided under section 126-5 or 126-15 of the Income Tax Assessment Act 1997 (ITAA 1997); and

(c)

a later court order varies or sets aside the original court order;

the later court order operates only prospectively (unless the order otherwise directs).

3. If a later court order sets aside an earlier court order and, as a result, there is a re-transfer of a CGT asset, there is roll-over under section 126-5 or 126-15 of the ITAA 1997 for the re-transfer.

Your comments

4. 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:
CGT asset
CGT event
court order
re-transfer
roll-over
spouse

Legislative References:
ITAA 1997 126-5
ITAA 1997 126-15
ITAA 1997 Subdiv 126-A
FLA 1975