| Disclaimer This edited version has been archived due to the length of time since original publication.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: 1051406879362
Date of advice: 31 July 2018
Ruling
Subject: Capital Gains Tax – pre-CGT land
Question 1
Will land acquired prior to 20 September 1985 retain its exemption from capital gains tax (CGT) under a marriage breakdown rollover provision?
Answer
Yes.
Having considered your circumstances and the relevant factors, the rollover provisions under Subdivision 126-A of the Income Tax Assessment Act 1997 (ITAA 1997) will apply. You are taken to have acquired your former wife’s share in the property before 20 September 1985 and it will retain its exemption from capital gains tax. Further information can be found on our website ato.gov.au and entering Quick Code QC52251 into the search bar at the top right of the page.
Question 2
Will the subdivided land retain the pre-20 September 1985 acquisition date of the original land and therefore be exempt from capital gains tax?
Answer
Yes
Having considered your circumstances and the relevant factors, as per section 112-25 of the Income Tax Assessment Act 1997 (ITAA 1997) when land is subdivided, the subdivision of the land does not constitute a CGT event. Subdivided pre-CGT land will retain its pre-CGT status. You are taken to have acquired your property before 20 September 1985 and it will retain its exemption from capital gains tax. Further information can be found on our website ato.gov.au and entering Quick Code QC55220 into the search bar at the top right of the page.
This ruling applies for the period ending
30 June 20XX
The scheme commenced on
1 July 20XX
Relevant facts and circumstances
You and your spouse purchased a property as joint tenants prior to 20 September 1985.
On the xx xxx xxxx both of you signed a Family Court Property Settlement Deed after separating which required the transfer of the property to you.
The transfer was finalised.
You stated since the property was purchased it has been your principal place of residence except for a short period where it was rented out.
You now intend to subdivide the land and sell the blocks. You will maintain your main residence on one of the blocks and the rest of the land will be subdivided into a further x blocks. You advise that you will hold full title on all of the blocks.
The only improvements to the land are what is required by Council for the land to be subdivided.
You advise that you are not undertaking any business activity in relation to the subdivision.
You are not undertaking the subdivision as a property developer.
You may decide not to subdivide and sell the property on one title.
Relevant legislative provisions
Section 6-5 Income Tax Assessment Act 1997
Section 15-15 Income Tax Assessment Act 1997
Section 102-20 Income Tax Assessment Act 1997
Section 108-70 Income Tax Assessment Act 1997
Section 112-25 Income Tax Assessment Act 1997
Section 126-5 Income tax Assessment Act 1997