| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1051318585797
Date of advice: 11 December 2017
Ruling
Subject: CGT – disposal - artwork
Question 1
Did capital gains tax (CGT) event A1 occur upon the disposal of the collectables?
Answer
Yes
Question 2
Are you entitled to disregard any capital gain or capital loss made from the disposal of the collectables?
Answer
Yes
CGT event A1 occurs when you dispose of a CGT asset (section 104-10 of the Income Tax Assessment Act 1997 (ITAA 1997)). A collectable, such as your items are considered to a CGT asset that is mainly used or kept for your own personal use or enjoyment (section 108-10 of the ITAA 1997).
Subsection 104-10(5) of the ITAA 1997 states that a capital gain or capital loss is disregarded if you acquired the asset before 20 September 1985.
In your case, we consider that CGT event A1 occurred upon the sale of the collectable items. As you acquired the items before 20 September 1985, any capital gain or capital loss made from the A1 event would be disregarded.
This ruling applies for the following period:
Year ended 30 June 2018
The scheme commences on:
1 July 2017
Relevant facts and circumstance
You produced a number of works of collectable items (the items) before 20 September 1985, which were exhibited at various locations around the country.
You retained the items as part of your own collection.
The items have been stored for over XX years.
You decided to display the items with the intention of selling the items.
The items were sold to public collectors.
You received $X as the proceeds from the sale of the items.
You were in the business of producing collectable items.
You have retired from this business; however you continue to produce collectable items for your own personal enjoyment.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 104-10
Income Tax Assessment Act 1997 section 108-10