| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1051377219430
Date of advice: 5 June 2018
Ruling
Subject: Capital gains tax (CGT) - CGT events - CGT event A1 - disposal of a CGT asset
Question
Will the capital gain or loss you made on the sale of your subdivided block of land be disregarded?
Answer
Yes.
In this case you acquired the property before 20 September 1985. Therefore, the property is a pre-CGT asset.
When the property was subdivided, the subdivided blocks of land retained the CGT status of the property. That is, each subdivided block of land is a pre-CGT asset.
While CGT event A1 will occur when the sale contract on Lot one is entered into, as each subdivided block of land is a pre-CGT asset, any capital gain made on the disposal of Lot one will be disregarded.
This ruling applies for the following period:
Year ended 30 June 20xx
The scheme commences on:
1 July 20xx
Relevant facts and circumstances
You purchased a property sometime before the 20 September 1985.
You resided in the dwelling as your main residence.
The size of the land was approximately xxxx square metres.
The land was subdivide into three lots; lot one being xx square metres, lot two being xx square metres and lot three being xx square metres.
You retained lot two which included your family home and lot one which has remained vacant land.
Lot three was sold to a family member, who did not pay an amount for the purchase, but instead covered all costs associated with the subdivision.
Lot one will be sold within the period of this ruling.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 6-5
Income Tax Assessment Act 1997 Section 102-20
Income Tax Assessment Act 1997 Section 104-10
Income Tax Assessment Act 1997 Section 112-25
Income Tax Assessment Act 1997 Part 3-1
Income Tax Assessment Act 1997 Part 3-3