Private ruling: Whether the disposal of land is on revenue account
Date of advice: 21 February 2017
Published: August 2017
Ruling period: Year ending 30 June 2017 | Year ending 30 June 2018 | Year ending 30 June 2019 | Year ending 30 June 2020 | Year ending 30 June 2021
Date scheme commenced: 1 July 2016

Ruling: Q1: Are the proceeds of sale on realisation of the subdivided residential lots assessable under either section 6-5 or section 15-15 of the Income Tax Assessment Act 1997 (Cth)? | A1: No | Q2: Are the sale proceeds assessable under the capital gains tax provisions in Chapter 3 of the Income Tax Assessment Act 1997 (Cth)? | A2: Yes

Relevant facts and circumstances: This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling. ● This ruling relates to the same scheme as those issued to the applicants in 20XX under authorisation numbers 1012150514962. ● The applicants own land that has been used for business purposes over a number of years. ● The business has been relocated and the land has been subdivided into residential blocks.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5, | Income Tax Assessment Act 1997 section 15-15, | Income Tax Assessment Act 1997 section 104-10, and | Income Tax Assessment Act 1997 section 112-25

Reasons for decision: Summary: The proceeds from realising an asset may fall into one of the following situations: ● it gives rise to income according to ordinary concepts under section 6-5 of the Income Tax Assessment 1997 ('ITAA 1997'); ● it gives rise to profit from the carrying on or carrying out of a profit-making undertaking or plan under section 15-15 of the ITAA 1997 if the asset was acquired before 20 September 1985; or ● it gives rise to a gain under capital gains tax (CGT) provisions in chapter 3 of the ITAA 1997. For the reasons given in respect to the applicants' previous ruling, authorisation number 1012150514962, the proceeds of the sale of the land to which this ruling applies would not be assessable income under either section 6-5 or section 15-15, and would be subject to the CGT provisions in chapter 3 of the ITAA 1997.