Private ruling: Deceased estate - subdivision - capital versus revenue
Date of advice: 19 December 2019
Published: February 2020
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 September 20XX

Ruling: Q1: Will the proceeds from the sale of the subdivided lots be subject to the capital gains tax provisions under Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No | Q2: Will any profits from the sale of the subdivided lots from the Land be assessable as ordinary income under section 6-5 of the ITAA 1997? | A2: Yes | Q3: Are the sales of subdivided lots taxable supplies within the meaning of section 9-5 of the A New Tax System (Goods and Services Tax) Act 1999 (GST Act)? | A3: Yes

Relevant facts and circumstances: A property (the property) was acquired post CGT by Persons A & B. The property was a number of hectares and intended to be used as a holiday house for the family and to eventuate in the longer term to use for main residence purposes. At the time of purchase, the property was zoned rural and removed from a nearby town. The retirement plans did not eventuate for Persons A & B due to health issues, and both passed within a 12 month period of each other. Upon the death of the Person A, their interest in the property passed to Person B. Upon the death of the Person B, the property passed to you as the executors named in their will (you).. The property is still held by you as executors for the estate. Since the passing of Persons A & B, the property has continued to be used by the extended family as a holiday house. There have been no previous attempts made to subdivide or sell parts of the property. The surrounding area has been subject of considerable growth, with a number of residential developments and rezoning of land. Various planning reports were published over a decade ago for the future growth of the surrounding area. A planning report, conducted by a professional entity for the council identified the area in which the property was located as suitable for possible residential subdivision. The report was prepared to guide the council for the planning of the surrounding area over the next two decades. The council instigated a planning workshop in relation to an area of land including the property and surrounding land, to discuss potential planning outcomes. Sometime later, you were approached by an adjoining landowner's planning consultants to discuss a boundary adjustment and subsequent land swap, as the adjoining landowner's property was in the process of being developed. The purpose of the boundary adjustment was to create a better subdivision design of the proposed neighbouring development and to establish a buffer zone between your property and the proposed development. You agreed to this arrangement as it allowed you to retain the use of the property and wanted as large a buffer zone as possible from the development. The subdivision by the adjoining owner had been designed so traffic could flow around the property. The property extended to a proposed major collector road, which was required by the council as a key entry into the estate. You did not want to be involved in developer contributions or the cost for the construction of this road. The developer offered to acquire part of the property, to mitigate any planning and construction risk in dealing with the property. You agreed to this proposal to ensure you were not part of that development. The agreement between the parties was recorded in an agreement which ensured: · That the land area of the property remained unchanged. · The adjoining landowners were required to undertake all of the work relating to the boundary adjustment and were to pay all costs. · You were to pay an appropriate portion of title fees and your own legal costs. The property was recently rezoned. As a result there was an increase in the holding cost of the property, in particular land tax and council rates. Due to the significant costs in maintaining the property it was decided to sell part of the property. You were approached by developers to purchase the property however, you did not wish to sell the house and the approach was not considered. A short period after the developer approached you; you were introduced to a family friend to provide guidance on the development. It was then decided to utilise their skillset to project manage the process and develop the property into a number of vacant lots. Under the arrangement, you will leave all development tasks to the developer and hired consultants under a Development Agreement (the Development Agreement). You will not be involved in the works directly or indirectly in connection with the development site. You signed consents and applications when requested but did not give direction to the professionals on the formation of the development. The costs of the consulting were not directly paid for by you. You have entered into a Development Agreement with the developer for the development of part of the property. The Development Agreement includes the following details: · You provide exclusive rights to the developer in relation to the development · The developer will pay all costs, however, you will pay a development fee · Details of breach and termination including amounts payable by you in the event of termination by either party · Generally the distribution of sale proceeds will result in you receiving proceeds after GST liability, payment of the development fee, and the developer in payment of other costs. The resulting proceeds will be split between you and the developer. You will not receive a fixed amount. You have details of the financial projections prepared for the development. The sale of each lot will be in your name as executors. The lots will be sold under the instruction of the developer through a real estate agent. You are not registered for GST, individually or in your capacity executors. You held an ABN since commencement but at no time have you been registered for GST. You have not been involved in any property development or subdivision in the past and do not intend to be involved in property development in the future. You have provided details of the expected gross proceeds. You have provided details of the costs including civil costs, professional fees and development fees. You have provided details of your expected net proceeds. All associated cost of the existing dwelling will be paid by you. There are future plans to refurbish the whole home to ensure the up-keep and maintenance of the home; however, there are no plans in place for extensions or improvements to the property. There is no immediate plan in place for the associated costs with the refurbishment and who will be paying the funds. The planning permit from the council includes provisions for the creation of a number of allotments with each allotment connected with power, sewer, water, drainage and telecommunications, construction of roads, pathways, street signs, street furniture, fire hydrants, landscaping works and a public open space. You have provided a map of the proposed subdivision showing the subdivided lots.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 10-5 | Income Tax Assessment Act 1997 Section 70-10 | Income Tax Assessment Act 1997 Section 70-30 | Income Tax Assessment Act 1997 Section 102-5 | Income Tax Assessment Act 1997 Section 104-10 | Income Tax Assessment Act 1997 Subsection 104-10(5) | Income Tax Assessment Act 1997 Section 108-5 | Income Tax Assessment Act 1997 Section 112-25 | Income Tax Assessment Act 1997 Subsection 118-25(1) | Income Tax Assessment Act 1997 Section118-20 | Income Tax Assessment Act 1997 Subsection 995-1(1) | A New Tax System (Goods and Services Tax) Act 1999 Section 9-5 | A New Tax System (Goods and Services Tax) Act 1999 Section 9-40 | A New Tax System (Goods and Services Tax) Act 1999 Section 23-5 | A New Tax System (Goods and Services Tax) Act 1999 Division 188

Reasons for decision: Summary: The planned subdivision is substantial in scale and the project which includes significant infrastructure including the laying out and construction of roads, provision of open space and improvement that amounts to development and improvement of the land to such a marked degree, that it is not considered a mere realisation of a capital asset. Therefore, the proceeds of the subdivided lots will be assessable to the estate under section 6-5 of the Income Tax Assessment Act 1997 (ITAA 1997) as income form carrying on a business of property development. | Detailed Reasoning - Detailed reasoning: There are three ways profits from property sales can be treated for taxation purposes: Under section 6-5 of the ITAA 1997, your assessable income includes the ordinary income you derived directly or indirectly from all sources, during the income year. Carrying on a business Subsection 995-1(1) of the ITAA 1997 defines 'business' as 'including any profession, trade, employment, vocation or calling, but not occupation as an employee'. The question of whether a business is being carried on is a question of fact and degree. The courts have developed a series of indicators that are applied to determine the matter on the particular facts. Taxation Ruling TR 97/11 Income tax: am I carrying on a business of primary production? provides the Commissioner's view of the factors used to determine if you are in business for tax purposes. In the Commissioner's view, the factors that are considered important in determining the question of business activity are: · whether the activity has a significant commercial purpose or character · whether the taxpayer has more than just an intention to engage in business · whether the taxpayer has a purpose of profit as well as a prospect of profit from the activity · whether there is regularity and repetition of the activity · whether the activity is of the same kind and carried on in a similar manner to that of ordinary trade in that line of business · whether the activity is planned, organised and carried on in a businesslike manner such that it is described as making a profit · the size, scale and permanency of the activity, and · whether the activity is better described as a hobby, a form of recreation or sporting activity. No one factor is decisive. The indicators must be considered in combination and as a whole. As to when such a business is taken to have commenced, Taxation Determination TD 92/124 Income tax: property development: in what circumstances is land treated as 'trading stock'?, also states that a business activity is taken to have commenced when a taxpayer embarks on a "definite and continuous cycle of operations designed to lead to the sale of the land." That is, the land will become trading stock when you are demonstrably fully committed to the business of land development. When that occurs is determined by a consideration of the facts of the case. Trading Stock When the business starts, the subdivided land becomes trading stock. Section 70-10 of the ITAA 1997 provides that trading stock includes anything produced, manufactured or acquired that is held for purposes of manufacture, sale or exchange in the ordinary course of a business. Taxation Determination TD 92/124 states that land will be treated as trading stock for income tax purposes if it is held for the purpose of resale and a business activity which involves dealing in land has commenced. Where such a business exists, the proceeds from the sale will be assessable under section 6-5 of the ITAA. Isolated transactions Alternatively, Taxation Ruling TR 92/3 Income tax: whether profits on isolated transactions are income discusses profits on isolated transactions and the application of the principles outlined in the decision of the Full High Court of Australia in FCT v. Myer Emporium Ltd (1987) 163 CLR 199; 87 ATC 4363; (1987) 18 ATR 693. This ruling states that profits on isolated transactions may be income. Profit from an isolated transaction will be ordinary income where: · the intention or purpose of a taxpayer in entering into the transaction was to make a profit or gain and · the transaction was entered into, and the profit was made, in the course of carrying on a business operation or commercial transaction. Profits on the sale of subdivided land can therefore be income according to ordinary concepts within section 6-5 of the ITAA 1997, if the taxpayer's subdivisional activities have become a separate business operation or commercial transaction, or an isolated profit making venture. Taxation Ruling TR 92/3 outlines that the relevant intention or purpose of the taxpayer, of making a profit or gain, is not the subjective intention or purpose of the taxpayer. Rather, it is the taxpayer's intention or purpose discerned from an objective consideration of the facts and circumstances of the case. In very general terms, a transaction or operation has the character of a business operation or commercial transaction if the transaction or operation would constitute the carrying on of a business except that it does not occur as part of repetitious or recurring transactions or operations. CGT provisions CGT event A1 in section 104-10 of the ITAA 1997, relating to the disposal of a CGT asset, will happen when you dispose of each subdivided block. You will make a capital gain if the capital proceeds from the disposal of the block are more than the cost base of the block. You will make a capital loss of those capital proceeds are less than the reduced cost base of the block. Where the land is treated as trading stock, section 118-25 of the ITAA 1997 provides that a capital gain or capital loss you make at the time of CGT event is disregarded. Application to your situation Carrying on a business We acknowledge the property has been held in the family for over a number of decades, more recently in Person B's, and used as a holiday home for the extended family. The property's initial purchase was not to derive an income or as trading stock for development purposes. The property was subject to the future plan for the development in the surrounding area. When the property was transferred to you, you did not consider the idea of subdividing the property; rather you initially intended to hold the property for private use. You have no prior history of property development and have no plans to be involved in further developments. However, the intent for which the land is held can change the asset from being a capital asset. You previously had an offer from a developer to dispose of the whole property including the dwelling but declined as you wished to retain the house. Within a short period of time after that offer, you entered into a Development Agreement with another property developer. You were introduced to the developer through a mutual connection and the Commissioner is of the view that you initiated the development through the developer although you did not reach agreeable terms through the developer who first approached you. The subdivision will be carried out in an organised and planned manner with large scale commercial purpose. We note that the land will be developed over a number of stages. The scale of the development, producing well over 30 lots, supports the view that you are carrying on a business. The development agreement grants a power of attorney to the developer and the developer is required to undertake all responsibility and associated works including the marketing and sale of the lots, you will remain the landowner throughout the whole process, as nothing in the development agreement indicates the land will pass to the developer. Furthermore, the Development Agreement specifies that it is you who will enter into contracts of sale with the purchasers of the subdivided lots. Additionally, it is you who is required on all documentation and requirements as legal title owner of the land. You cannot sell the land without the consent of the developer or enter into any other business deals in relation to the land. Although you contend your role is entirely passive, you are still assuming the associated risk of the development through profit sharing arrangements; risk in termination; and lapse of time over the number of years of development. The Development Agreement provides that the developer receives payment for its development costs before any payments are made to you (also after any GST liability). After all expenses are paid, the remaining proceeds are to be split between you and the developer until return on costs is achieved. Once the forecast return is achieved; you will again share the remaining sale proceeds after development fees and costs with the developer. Therefore, depending on future movements in land values, the total amount you will receive is uncertain and dependent on market forces, and a degree of risk remains. The Development Agreement notes, in the event of termination by you because of a developer breach, you are required to pay the developer a percentage of the market value of the land plus GST at the time of termination and an amount equal to the outstanding project costs, at the time of termination, within the designated time of the termination agreement. Even though the developer has breached the contract, you as legal owner of the land, will be required to pay these amounts within the designated time days of the breach. More broadly, in any event of termination, the financial risk involved in the development rests directly with you. While you stand to make profit from the overall development, in the event the development fails or a developer breach, you will be subject to losses or resulting liabilities. While you contend that your role will be passive, ultimately you, as the legal owner, will bare significant financial risk in entering into the transaction. The development will require significant infrastructure activities including construction of roads, pathways, open space, and connection of water, sewer, and telecommunications to all lots. There has been a change in purpose for which the land is held, as it is now held by you for the purpose of resale in the form of subdivided blocks, as opposed to its previous use of a holiday home for the extended family. As you are carrying on a business of property development and subdivision, the property will be treated as trading stock under section 70-10 of the ITAA 1997. When the property becomes trading stock, the owner is treated as having disposed of the land for either its cost or market value and acquired the property back as trading stock for the same amount. The owner can elect to use the value at cost or market value of the Land. If the owner elects to use the market value, CGT event K4 will occur. CGT event K4 occurs when the business commences. Isolated transactions Alternatively, the Commissioner is satisfied that if you are not carrying on a business, the proceeds from the sale of the properties will be those from an isolated transaction. Although the property was originally held for private purposes, this intention is not definitive alone. There has been a change in purpose for which the land is held, as it is now held primarily for the purpose of resale in the form of subdivided blocks, and note that you will retain ownership of the subdivided blocks. There is a coherent plan for the subdivision of land through a number of steps. Based on the facts, it can be concluded that the development and subsequent sale of the subdivided lots, occurs with the intention of profit as a commercial transaction. Therefore, proceeds from the sale of the subdivided blocks will constitute a profit from an isolated transaction and should be included as ordinary income under section 6-5. Following this, where you are not carrying on a business the land would not be treated as trading stock. Conclusion In this case, you are considered to be carrying on a business of property development and any profit from the sale of the subdivided lots will be assessable as ordinary income under section 6-5 of the ITAA 1997. The property will be considered trading stock, and any capital gain or loss made at the time of sale of the subdivided lots will be disregarded under subsection 118-25(1)(a) of the ITAA 1997. Alternatively, whilst CGT event A1 will occur on the disposal of the subdivided lots, the disposal of each lot will be viewed as an isolated transaction. Any profit from the sale will be assessable as ordinary income under section 6-5 of the ITAA 1997 as an isolated transaction. Any capital gain arising from each CGT event will be reduced to the extent any profit is also assessable under section 6-5 of the ITAA 1997. | Detailed Reasoning - Issue 2: In this reasoning of issue 2: · unless otherwise stated, all legislative references are to the A New Tax System (Goods and Services Tax) Act 1999 (GST Act) Section 9-40 provides that you are liable for GST on any taxable supplies that you make. Section 9-5 provides that you make a taxable supply if: (a) you make the supply for consideration (b) the supply is made in the course or furtherance of an enterprise that you carry on (c) the supply is connected with the indirect tax zone (Australia), and (d) you are registered, or required to be registered for GST. However, the supply is not a taxable supply to the extent that it is GST-free or input taxed. You intend to subdivide the property into residential lots. For the supply of your subdivided land to be a taxable supply, all of the requirements in section 9-5 must be satisfied. In this case, you will be selling vacant residential lots for consideration in Australia. Therefore, paragraphs 9-5(a) and 9-5(c) will be satisfied. Further, the supply of the lots in your situation will neither be GST-free or input taxed. Accordingly, we must determine whether: (a) your sale of the lots are in the course or furtherance of an enterprise that you are carrying on, and (b) if so, whether you are required to be registered for GST. Enterprise Section 9-20 provides that the term 'enterprise' includes, among other things, an activity or series of activities done in the form of a business or in the form of an adventure or concern in the nature of trade. The phrase 'carry on' in the context of an enterprise includes doing anything in the course of the commencement or termination of the enterprise. Miscellaneous Taxation Ruling MT 2006/1 The New Tax System: the meaning of entity carrying on an enterprise for the purposes of entitlement to an Australian Business Number provides guidance on what activities will amount to an enterprise. Paragraph 234 of Miscellaneous Taxation Ruling MT 2006/1 distinguishes between activities done in the form of a 'business' and those done in the form of 'an adventure or concern in the nature of trade'. In particular: · A business encompasses trade engaged in on a regular or continuous basis. · An adventure or concern in the nature of trade may be an isolated or one-off transaction that does not amount to a business, but which has the characteristics of a business deal. Paragraph 178 of Miscellaneous Taxation Ruling MT 2006/1 lists a number of indicators considered when attempting to determine whether an activity or series of activities amount to a business. | Detailed Reasoning - 1.: A significant commercial activity. You propose to subdivide the property into a number of vacant lots of land. The development will be fully serviced with water, sewer, roads, telecommunications NBN at the time of construction. There will be open space area. The subdivision may be considered a multi stage subdivision. | Detailed Reasoning - 2.: A purpose and intention of the taxpayer to engage in commercial activity. Whilst you contend that you are under the control of the developer, you have engaged yourself in this venture in a commercial and business-like manner as per the facts contained in this ruling. | Detailed Reasoning - 3.: An intention to make a profit from the activity. There is intention to make a profit as evidenced by the significant costs and estimated sale proceeds. | Detailed Reasoning - 4.: The activity is or will be profitable. Estimated profit is significant with estimated expenses also being substantial. | Detailed Reasoning - 5.: The recurrent or regular nature of the activity. You have not been involved in any other development or subdivision activities, although you were previous involved in a land swap with an adjoining landowner. | Detailed Reasoning - 6.: The activity is carried on in a similar manner to that of other businesses in the same or similar trade. The developer on your behalf has taken systematic steps including, planning the subdivision, determining the profitability of the subdivision and engaging required professionals. These are the types of activities routinely undertaken by a person engaged in property development. | Detailed Reasoning - 7.: Activity is systematic, organised and carried on in a businesslike manner and records are kept. The works are carried out in a businesslike manner, similar to other developments. | Detailed Reasoning - 8.: The activities are of a reasonable size and scale. As evidenced by indicator 1 and 4. | Detailed Reasoning - 9.: A business plan exists. A business plan is evident in the development agreement and also documented in the reports. | Detailed Reasoning - 10.: Commercial sales of product. The developer, on your behalf, will engage local real estate agents as and when the lots become available for sale. | Detailed Reasoning - 11.: The entity has relevant knowledge or skill. You will be relying on the expertise of the developer that you have engaged. In addition paragraph 265 of Miscellaneous Taxation Ruling MT 2006/1 includes a list of factors from Statham & Anor v. Federal Commissioner of Taxation (Statham) and Casimaty v. FC of T (Casimaty) in relation to isolated transactions and sales of real property that provide assistance in determining whether activities are a business or an adventure or concern in the nature of trade is being carried on. If several of these factors are present it may be an indication that a business or an adventure in the nature of trade is being carried on. | Detailed Reasoning - 1.: There is a change of purpose for which the land is held. Historically the property was used as a holiday home for the extended family for a number of years. There has been a change in zoning. Although you held the property for domestic purposes, it is now considered to be held for the purpose of development and sale. | Detailed Reasoning - 2.: Additional land is acquired to be added to the original parcel of land. Some years ago, you participated in a land swap with an adjoining land owner to assist with their development activities. | Detailed Reasoning - 3.: The parcel land is brought into account as a business asset. No clear evidence on this factor. | Detailed Reasoning - 4.: There is a coherent plan for the subdivision of the land Refer to indicator 2 and 6 in Table 1. | Detailed Reasoning - 5.: There is a business organisation - for example a manager, office and letterhead. The developer that has been appointed by you has a business organisation. | Detailed Reasoning - 6.: Borrowed funds financed the acquisition or subdivision. The sales of the lots are expected to cover the development expenses. | Detailed Reasoning - 7.: Interest on money borrowed to defray subdivisional costs was claimed as a business expense. N/A | Detailed Reasoning - 8.: There is a level of development of the land beyond that necessary to secure council approval for the subdivision. Typically council requirements are inherently significant. Under your proposed development this may include: · road (as per the plan of subdivision) · infrastructure including water, sewer, telecommunications, and NBN · one area of open space. | Detailed Reasoning - 9.: Buildings have been erected on the land. No additional buildings will be constructed. Paragraph 266 of Miscellaneous Taxation Ruling MT 2006/1 recognises that in determining whether activities relating to isolated transactions are an enterprise or are the mere realisation of a capital asset, it is necessary to examine all the facts and circumstances. Whilst this includes consideration of the factors outlined above there are other relevant factors that need to be weighed up as part of the process of reaching an overall conclusion. No single factor will be determinative rather it will be a combination of factors that will lead to a conclusion as to the character of the activities. Further factors we have taken into consideration include: · You had a previous offer from a developer to purchase the whole land in which you denied due to wanting to retain the existing house. You have provided no evidence of trying to dispose of the excess land while maintaining the holiday home. You now have entered into a development agreement bearing the associated risks. · The development has a significant commercial purpose and is planned, organised and carried on in a businesslike manner in order to make a profit. This is supported by the large scale of the total development yielding a significant number of lots. The entire development will be carried out in a number of stages. · Significant infrastructure activities are planned including roads, water, sewer, and telecommunications and will result in significant costs. · Once the property has been developed and subdivided you will continue to hold the subdivided lots for the purposes of sale. You bare a degree of risk in any arrangement with the developer as you bare the financial risk if the lots do not sell. · The financial and commercial risk rests directly with you as the legal owner, if the lots do not sell or the event of a breach; you bare all profit and loss risk in relation the development of the lots. · There is a significant expense associated with the development of over a million dollarsand compared with the expected proceeds indicates there is an intention to make a profit, rather than realise the value of the property thorough a sale of a capital asset. In Casimaty, Ryan J found that the taxpayer was not carrying on a business of property development, but was merely selling off the family farm, that had been gifted to him by his father, in a piecemeal fashion. In Casimaty, the property was subdivided in a number of stages, at different times, so that there was 'no coherent plan conceived at the outset'. Your situation can be distinguished from Casimaty in that you are not undertaking the subdivision in a piecemeal fashion. A coherent plan is in place for the development of the land. Furthermore, it is considered that the size and scale of the development being undertaken is such that the development cannot be considered to be a mere realisation of the land. After examining all the facts and circumstances, we consider your activities are a series of activities done in the form of a business and/or a series of activities done in the form of an adventure or concern in the nature of trade. The resulting serviced lots from this development for the purposes of sale and has the character of a revenue asset, rather than a realisation of a capital asset. As such, your sales of the lots are in the course or furtherance of an enterprise that you are carrying on satisfying paragraph 9-5(b). Registration Section 23-5 provides that you are required to be registered for GST if: (a) you are carrying on an enterprise, and (b) your GST turnover meets the registration turnover threshold. The registration turnover threshold is currently $75,000. Section 188-10 provides that you have a GST turnover that meets a particular turnover threshold if: (a) your current GST turnover is at or above the turnover threshold and the Commissioner is not satisfied that your projected GST turnover is below the turnover threshold, or (b) your projected GST turnover is at or above the turnover threshold. Of relevance here is your projected GST turnover. Section 188-20 provides that your projected GST turnover at a time during a particular month is the sum of the values of all the supplies that you have made or are likely to make during that month and the next 11 months other than input taxed supplies. In working out your projected GST turnover, paragraph 188-25(a) requires that you disregard any supply made or likely to be made, by you by way of transfer of ownership of a capital asset of yours. Paragraph 260 of Miscellaneous Taxation Ruling MT 2006/1 explains that assets can change their character from being capital/investment assets to being trading/revenue assets, or vice versa, but cannot have a dual character at the same time. Goods and Services Tax Ruling GSTR 2001/7 Goods and Services Tax: meaning of GST turnover, including the effect of section 188-25 on projected GST turnover discusses the meaning of a 'capital asset' at paragraphs 31 to 36. Capital assets are often referred to as structural assets used by an entity to produce an income. Capital assets are to be distinguished from revenue assets. If the means by which you derive income is through the disposal of assets, those assets will be revenue or trading assets rather than capital assets. We have considered section 188-25 and this section does not apply as the sale of the lots has the character of a revenue asset, rather than a realisation of a capital asset. As the sale proceeds for the sale of the lots will exceed the registration turnover threshold you will be required to be registered for GST. The supply of your subdivided land is considered to be a taxable supply as all of the requirements of a taxable supply under section 9-5 will be met.

As ordinary income under section 6-5 of the ITAA, on revenue account, as a result of carrying on a business of property development, involving the sale of land as trading stock; | As ordinary income under section 6-5 of the ITAA, on revenue account, as a result of an isolated business transaction entered into by a non-business taxpayer, or outside the ordinary course of business of a taxpayer carrying on a business, which is the commercial exploitation of an asset acquired for a profit making purpose; | As statutory income under the capital gains tax legislation.