| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private ruling
Authorisation Number: 1011763962631
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns.
Ruling
Subject: : Capital gains tax - cost base
Question
Is a deposit bond fee part of the cost base of the investment property?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 2011
The scheme commences on:
During 2001
Relevant facts and circumstances
You purchased an investment property using a deposit bond, which was necessary to proceed to property settlement.
You obtained the deposit bond in 2001. A fee was payable in respect of the maximum bond amount.
Detailed reasoning
A deposit bond is considered to be a separate asset and therefore any costs in respect of it are not included in the cost base of the property.
The cost incurred for the deposit bond forms part of the cost base of the deposit bond, being the relevant asset acquired, for capital gains tax purposes.
Note: When settlement occurred the deposit bond lapsed and you had a capital loss equal to the fees incurred.
Relevant legislative provisions
Income Tax Assessment Act 1997 Subsection 110-25(2),
Income Tax Assessment Act 1997 Subsection 110-25(3), and
Income Tax Assessment Act 1997 Subsection 110-35(3)