Private ruling: CGT - disposal
Published: June 2015
Ruling period: Year ending 30 June 2015
Date scheme commenced: 1 July 2014

Ruling: Q1: Will the sale of the proceeds from the sale of the property be subject to capital gains tax? | A1: Yes

Relevant facts and circumstances: You purchased a 20% share in a property in 20XX. The house on the property was rented from 20XX until March 20XX, when the property was sold. You received 20% of the net rental income from the property between 20XX and 20XX. No works were completed on the property prior to sale.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 108-5 | Income Tax Assessment Act 1997 section 104-10

Reasons for decision: Summary: A capital gain or a capital loss may arise if a capital gains tax event (CGT event) happens to a capital gain tax asset (CGT asset). Section 108-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a CGT asset is any kind of property, or a legal or equitable right that is not property. CGT event A1 occurs when you dispose of a CGT asset. You are considered to have disposed of a CGT asset if a change of ownership occurs from you to another entity because of some act or event or by operation of law. The capital gain or capital loss is made at the time of the event (section 104-10 of the ITAA 1997). In your case, your share in the property would be considered a CGT asset. CGT event A1 occurred on the date the contract of sale for the property was signed. A capital gain or loss was made at that time.