Private ruling: Capital gains tax (CGT) - CGT events - CGT event A1 - disposal of a CGT asset
Date of advice: 5 June 2018
Published: August 2018
Ruling period: Year ended 30 June 20xx
Date scheme commenced: 1 July 20xx

Ruling: Q1: Will the capital gain or loss you made on the sale of your subdivided block of land be disregarded? | A1: 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.

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