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This edited version has been archived due to the length of time since original publication.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: 1051362189649

Date of advice: 16 April 2018

Ruling

Subject: Disposal of a CGT asset

Question

Will a capital gains tax (CGT) liability arise when you dispose of your land?

Answer

    Yes

This ruling applies for the following period:

    Year ending 30 June 20XX

The scheme commences on:

    1 July 20XX

Relevant facts and circumstances

You purchased land in 20XX for $XXX,XXX.XX.

You use this land to grow crops.

You will sell the land in the 20XX income year for $XX million.

You will make a CGT gain.

Relevant legislative provisions

Income Tax Assessment Act 1997 (ITAA 1997) Section 102-20

Reasons for decision

A capital gain or loss may be made when a CGT event happens to a CGT asset. Land acquired after 19 September 1985 is a CGT asset.

The most common CGT event is CGT event A1 and this occurs when an entity disposes of the ownership interest in an asset Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997).

The sale of land would be considered to be a CGT event A1.

In your case you purchased land in 20XX.

You will sell this land in 20XX.

As the land is a CGT asset the CGT provisions will apply and the sale will be subject to the CGT provisions.

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