Draft Taxation Determination
TD 93/D75
Income tax: capital gains: how is the removal of a building from a block of land treated for CGT purposes?
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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 93/180.
FOI status:
draft only - for commentPreamble
| Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO. |
1. The removal of a building from a block of land is not a disposal of any asset because, at that time, there is no change in ownership of either the land or the building.
2. Rather, the original asset has been split into two separate assets (the land and the building). Where the original asset was acquired post-CGT, its cost base immediately before the removal is apportioned between the split assets (subsection 160ZH(12) of the Income Tax Assessment Act 1936).
Example
Land with a building attached is purchased in 1987. In 1992, the building is relocated to another site.
For CGT purposes, there is no disposal arising from the removal of the building.
The cost base of the original asset is apportioned between the land and the building.
Commissioner of Taxation
1 April 1993