Private ruling: Capital gains tax
Date of advice: 17 August 2021
Published: October 2021
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are you able to use a quantity surveyors report to reconstruct your records for Capital Gains Tax (CGT) purposes? | A1: Yes.

Relevant facts and circumstances: You have a CGT asset being a residential property which is your current main residence. You have not always claimed it as your main residence for CGT purposes. The property had extensive renovations and additions made when it was not treated as main residence exempt. The computer that had the relevant financial records for the property's capital works cost was stolen and damaged.

Relevant legislative provisions: Income Tax Assessment Act 1997 Division 121 | Income Tax Assessment Act 1997 subsection 121-20(5)

Reasons for decision: Summary: Division 121 of the Income Tax Assessment Act 1997 (ITAA 1997) addresses the record keeping requirements under the CGT provisions. It requires that you must keep records of every act, transaction, event or circumstance that may be relevant to working out whether you have made a capital gain or capital loss from a CGT event. If records are lost or have not been maintained for the purpose of calculating your CGT cost base you should first make an attempt to obtain the relevant documentation by approaching the relevant parties and obtaining copies. These may be obtained from builders, contractors, accountants, insurance bodies, solicitors, real estate agents and/or government authorities. In the event that the necessary documentation cannot be obtained, subsection 121-20(5) of the ITAA 1997 provides that if the necessary records of an act, transaction, event or circumstance do not already exist, you must reconstruct them or have someone else reconstruct them. Taxation Ruling 97/25 Income tax: property development: deduction for capital expenditure on construction of income producing capital works, including buildings and structural improvements details that an estimate can be used when the actual construction expenditure incurred on capital works cannot be ascertained. While not specifically on point, we accept that the same principles can be used in your scenario. Paragraphs 23-31 of TR 97/25 are relevant and paragraph 28 specifically states that a quantity surveyors report can be used. Therefore, you can use a quantity surveyors report to reconstruct your records for the property.

This ruling applies for the following period: