Private ruling: CGT - acquisition date
Published: September 2014
Ruling period: Year ended 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Is the acquisition date of your property for capital gains tax (CGT) purposes the time of settlement? | A1: No. | Q2: Is the acquisition date of your property for CGT purposes the date you signed the contract? | A2: Yes.

Relevant facts and circumstances: You purchased an investment property from your partner under contract. The property was transferred to you some time after. The property was being rented out, prior to you purchasing it. You continued to rent the property out after you purchased it. You began receiving rent from the property after it was transferred to you. Prior to the property being transferred to you, you did not receive any rental income or make any loan repayments. You sold the property during the 2013-14 income year on the open market.

Relevant legislative provisions: Income Tax Assessment Act 1997 (ITAA 1997) section 109-5

Reasons for decision: Summary: Subsection 109-5(1) of the Income Tax Assessment Act 1997 (ITAA 1997) states that: In general, you acquire a *CGT asset when you become its owner. In this case, the time when you *acquire the asset is when you become its owner. However, there are circumstances where your acquisition date for CGT purposes will be different from the date you become the owner, such as when you purchase an asset under a contract. If you entered into a contract to purchase a CGT asset, the time of acquisition is when you enter into the contract. In your case, you signed a contract to purchase the property, and the property was transferred to you some time after. Accordingly, you are taken to have acquired the property on the contract date for CGT purposes.