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Edited version of private ruling
Authorisation Number: 1011667102431
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Ruling
Subject: Capital gains tax (CGT) - asset rollover
Can the same asset rollover relief exempt you from CGT on the transfer of land to a company you wholly own?
Yes.
This ruling applies for the following period
Year ending 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts
You own a parcel of vacant land.
The land is registered in your name as an individual.
You intend on transferring the land to a wholly owned company of which you are the sole director and shareholder.
The property is not currently part of a business structure.
You will receive shares in the company for the transfer of the land.
The shares you receive will be ordinary shares.
The shares will be substantially the same as the market value of the asset.
You will own all shares in the company just after the time of the disposal of the asset.
The land will be used as a future investment.
The ordinary and statutory income of the company will not be exempt from income tax due to being an exempt entity in the year of the transfer.
Both you and the company will be Australian residents at the time of the transfer.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 122-15
Income Tax Assessment Act 1997 Section 103-25
Reasons for decision
Section 122-15 of the Income Tax Assessment Act 1997 provides that an individual can choose to obtain roll-over relief if one of a number of specified CGT events occur and certain conditions are satisfied. The disposal to a company of a CGT asset is an event to which this provision applies.
As a relevant CGT event will occur and all the conditions are satisfied, you can choose to obtain roll-over relief for the transfer of vacant industrial land into your wholly owned company.