Private ruling: CGT - boundary realignment
Date of advice: 6 March 2024
Published: 22 April 2024
Ruling period: Year ending 30 June 20XX | Year ending 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will each block retain its pre-Capital Gains Tax (CGT) status when there is a boundary realignment? | A1: Yes. Based on the information provided to the Commissioner each block of land will retain its pre-CGT status when the boundary is realigned. The properties will retain their pre-CGT status when the estate conducts a boundary realignment. A boundary realignment of land does not result in a CGT event being triggered.

Relevant facts and circumstances: The deceased passed away a few years ago. The deceased estate holds a number of parcels of land which are pre-CGT assets. Property 1 was acquired by the deceased a number of decades ago. Property 2 was acquired before Property 2. Property 2 was the deceased primary place of residence. Beneficiaries of the estate are both adult children of the deceased. One beneficiary resides in the house on Property 2. Both properties adjoin each other. The beneficiaries intend to do a boundary realignment whilst the assets are still held in the name of the estate. Property 1 would be increased and property 2 would be reduced as part of the realignment. The estate still needs to lodge relevant plans and seek approval from the relevant council.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 108-5