Private ruling: CGT - collectables and private use assets - disposal
Published: March 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Are your collectables considered to be personal use assets? | A1: Yes. | Q2: Will you be subject to capital gains tax (CGT) on the disposal of your personal use assets? | A2: No. | Q3: Does the absence of receipts demonstrating the value of these personal use assets result in a presumption that they were bought collectively? | A3: No. | Q4: Does the absence of receipts demonstrating that the personal use assets were bought separately result in a presumption that they were bought for over $10,000 or $500 | A4: No.


Relevant legislative provisions: Income Tax Assessment Act 1997 Section 6-5 | Income Tax Assessment Act 1997 Section 8-1 | Income Tax Assessment Act 1997 Subsection 108-20(1) | Income Tax Assessment Act 1997 Subsection 118-10(3)

Reasons for decision: Summary: Subsection 6-5(2) of the Income Tax Assessment Act 1997 (ITAA 1997) provides that the assessable income of a resident taxpayer includes ordinary income derived directly or indirectly from all sources during the income year. Under section 6-10 of the ITAA 1997, assessable income also includes statutory income. Statutory income is amounts that are not ordinary income but are included as assessable income by provisions of the tax law. | Detailed Reasoning - Capital Gains Tax (CGT): personal use assets: Section 102-5 of the ITAA 1997 provides that your assessable income includes net capital gain for the income year. However, a capital gain from a personal use asset is exempt from CGT if the asset was acquired for $10,000 or less (Section 118-10(3) of the ITAA 1997). You cannot make a capital loss from a personal use asset (Section 108-20(1) of the ITAA 1997). A personal use asset is a CGT asset, other than a collectable, that is kept or used mainly for your personal use and enjoyment. If personal use assets make up a set that would ordinarily be disposed of as a set, then the set makes up a single personal use asset. The exemption of $10,000 will apply to the set. | Detailed Reasoning - Application to your circumstances: The income you receive in relation to your activity is not assessable under section 6-5 of the ITAA 1997 as ordinary income. You are merely realising your capital assets. You are not carrying on a business in relation to sale of the collectables. The collectables are personal use asset's and were acquired for less than $10,000. Accordingly, any capital gain on a personal use asset is exempt from CGT. You cannot make a capital loss on a personal use asset. Therefore the proceeds of the sale are not included in your assessable income.

Relevant facts: You have purchased numerous collectables from 200X onwards. | You have left some of the collectables in their original wrapping. | You have had some autographed and display these in your apartment and show some to your friends. | You have purchased the collectables for your own personal use and enjoyment. | You have not purchased any of the collectables for more than $500.00 Australian dollars. | You are considering selling your collection online in one transaction to save selling costs. | You are not in the business of selling collectables.