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Edited version of private advice
Authorisation Number: 1052145458277
Date of advice: 20 July 2023
Ruling
Subject: CGT - personal use asset
Question
Will a capital gain you make from the sale of the samples be disregarded under subsection 118-10(3) of the Income Tax Assessment Act 1997 (ITAA 1997) on the basis that the samples are personal use assets?
Answer
Yes. Based on the information provided to the Commissioner, the sale will not trigger a CGT event when you decide to sell them as they are a personal use asset.
This ruling applies for the following period:
Year ending 30 June 2024
The scheme commenced on:
1 July 2023
Relevant facts and circumstances
You were employed as a senior professional.
You are the registered owner of a product, and your name is on a patent.
You receive a royalty when this product is used.
You set up your own business and produced further products which meant over time you collected more samples of the patented product which was being held for nostalgia reasons with the intention of passing on that history to your children.
These products are now being used around the world.
The samples you have are the workings and history of the development of these features.
Recently you were approached by a collector who runs a museum who would like to purchase some of these samples allowing the history of these products to be captured for prosperity purposes.
You intend on selling to the collector.
You expect that you will receive a certain amount of remuneration.
No firm offer has been made for the purchase of the products at the moment.
Relevant legislative provisions
Income Tax Assessment Act 1997 subsection 118-10(3)