Private ruling: Disposal of a CGT asset
Date of advice: 16 April 2018
Published: July 2018
Ruling period: Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will a capital gains tax (CGT) liability arise when you dispose of your land? | A1: Yes

Relevant facts and circumstances: You purchased land in 20XX for $XXX,XXX.XX. You use this land to grow crops. You will sell the land in the 20XX income year for $XX million. You will make a CGT gain.

Relevant legislative provisions: Income Tax Assessment Act 1997 (ITAA 1997) Section 102-20

Reasons for decision: Summary: A capital gain or loss may be made when a CGT event happens to a CGT asset. Land acquired after 19 September 1985 is a CGT asset. The most common CGT event is CGT event A1 and this occurs when an entity disposes of the ownership interest in an asset Section 102-20 of the Income Tax Assessment Act 1997 (ITAA 1997). The sale of land would be considered to be a CGT event A1. In your case you purchased land in 20XX. You will sell this land in 20XX . As the land is a CGT asset the CGT provisions will apply and the sale will be subject to the CGT provisions.

ATO view documents: Straight Interpretation of the law