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Draft Taxation Determination

TD 1999/D78

Income tax: capital gains: does a CGT event happen for the purposes of section 126-5 or 126-15 of the Income Tax Assessment Act 1997 because of a court order, if the order directs:

(a)
a transfer of non-specific matrimonial property; or
(b)
a transfer of specific CGT assets?

  • Please note that the PDF version is the authorised version of this draft ruling.
    This document has been finalised by TD 1999/52.

FOI status:

Not previously released in draft form

Preamble

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 answer to both questions is 'Yes'.

2. Most commonly, a court order under the Family Law Act 1975 directs that specific assets be transferred to a spouse. A CGT event happens for each CGT asset specified and it happens because of the court order. Similarly, if a court order directs a transfer of non-specific property, a CGT event happens for each CGT asset involved and it happens because of the court order.

3. A CGT event happens 'because of' a court order if the CGT event is caused by the court order.

Example

4. A court order under the Family Law Act 1975 might direct an individual to transfer 60% of their shares, or shares to a value of $100,000, to their spouse. The individual may choose which shares to transfer and, on their transfer, CGT event A1 (about disposals of CGT assets) in section 104-10 of the Income Tax Assessment 1997 happens because of the court order. On the other hand, the court may order that a particular or a defined parcel of shares be transferred. Again, CGT event A1 happens because of the court order.

Your comments

5. 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: 15 September 1999
Contact officer details have been removed following publication of the final ruling.

Commissioner of Taxation
18 August 1999

References

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

ISSN 1038 - 8982

Subject References:
CGT asset
CGT event
CGT event A1
court order
matrimonial property
roll-over

Legislative References:
ITAA 1997 104-10
ITAA 1997 126-5
ITAA 1997 126-15
FLA 1975


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