Private ruling: Capital gains tax - Subdivision of land/ trading stock
Date of advice: 7 October 2015
Published: November 2015

Ruling: Q1: Is the Land an asset held on revenue account since acquisition such that any gain on its disposal will be assessable as ordinary income? | A1: No | Q2: Will the proposed subdivision cause the Remaining Land to become trading stock in the trustee's hands under section 70-30 of the Income Tax Assessment Act 1997 (ITAA 1997)? | A2: Yes | Q3: If the answer to Question 2 is yes and the trustee elects under paragraph 70-30(1)(a) of the ITAA 1997 to be treated as having sold the subdivided land for its market value, will CGT event K4 occur under section 104-220 of the ITAA 1997? | A3: Yes


Relevant legislative provisions: Income Tax Assessment Act 1997 section 6-5 | Income Tax Assessment Act 1997 section 70-10 | Income Tax Assessment Act 1997 section 70-30 | Income Tax Assessment Act 1997 section 104-220 | Income Tax Assessment Act 1997 section 995-1

Reasons for decision: Summary: The private ruling was issued to the taxpayer based on the facts provided in the ruling application.