| Disclaimer This edited version has been archived due to the length of time since original publication.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 your written advice
Authorisation Number: 1051182892809
Date of advice: 21 February 2017
Ruling
Subject: Whether the disposal of land is on revenue account
Question 1
Are the proceeds of sale on realisation of the subdivided residential lots assessable under either section 6-5 or section 15-15 of the Income Tax Assessment Act 1997 (Cth)?
Answer
No
Question 2
Are the sale proceeds assessable under the capital gains tax provisions in Chapter 3 of the Income Tax Assessment Act 1997 (Cth)?
Answer
Yes
This ruling applies for the following periods:
Year ending 30 June 2017
Year ending 30 June 2018
Year ending 30 June 2019
Year ending 30 June 2020
Year ending 30 June 2021
The scheme commences on:
1 July 2016
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
● This ruling relates to the same scheme as those issued to the applicants in 20XX under authorisation numbers 1012150514962.
● The applicants own land that has been used for business purposes over a number of years.
● The business has been relocated and the land has been subdivided into residential blocks.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-5,
Income Tax Assessment Act 1997 section 15-15,
Income Tax Assessment Act 1997 section 104-10, and
Income Tax Assessment Act 1997 section 112-25
Reasons for decision
The proceeds from realising an asset may fall into one of the following situations:
● it gives rise to income according to ordinary concepts under section 6-5 of the Income Tax Assessment 1997 ('ITAA 1997');
● it gives rise to profit from the carrying on or carrying out of a profit-making undertaking or plan under section 15-15 of the ITAA 1997 if the asset was acquired before 20 September 1985; or
● it gives rise to a gain under capital gains tax (CGT) provisions in chapter 3 of the ITAA 1997.
For the reasons given in respect to the applicants' previous ruling, authorisation number 1012150514962, the proceeds of the sale of the land to which this ruling applies would not be assessable income under either section 6-5 or section 15-15, and would be subject to the CGT provisions in chapter 3 of the ITAA 1997.