Private ruling: Capital gains tax - licenses
Published: July 2012
Ruling period: Year ended 30 June 2013. | Year ended 30 June 2014. | Year ended 30 June 2015.
Date scheme commenced: 1 July 2012.

Ruling: Q1: Will the new licenses acquired under the new Management Plan be pre-CGT assets as they relate to licenses acquired before 20 September 1985 and the replacement asset roll over will apply? | A1: Yes. | Q2: Will stamp duty be payable on the new licenses? | A2: Decline to rule.


Relevant legislative provisions: Income Tax Assessment Act 1997 - Section 104-25 | Income Tax Assessment Act 1997 - Section 108-5 | Income Tax Assessment Act 1997 - Section 124-140 | Income Tax Assessment Act 1997 - Section 124-160

Reasons for decision: Detailed Reasoning - Question 1:: A statutory licence is an authority, licence, permit or quota granted by an Australian government agency under an Australian law. A CGT asset includes a legal and equitable right that is not property. The licence is a statutory right and therefore falls within the definition of a CGT asset. Roll-over is available if your ownership interest in one or more statutory licences ends, which results in CGT event C2 happening to the licences and as a result of the CGT event happening, you are issued one or more new licences. The new licences must authorise substantially similar activities to that authorised by the original licences. As a result of roll-over applying, if an entity acquired the original licences before 20 September 1985, they are taken to have acquired the new licences before that day. In this case the Trust acquired licenses prior to 20 September 1985. As a result of a government organisation moving to a new Management Act and associated new Management Plan the old licenses owned by the Trust will be revoked. The revocation of the old licenses is compulsory and the Trust will acquire a new licence under the new Management Plan. As the rights and unit entitlements attached to the new licenses will remain substantially the same as the old licenses, roll-over will apply. As the original licenses were acquired before 20 September 1985, the new licenses are taken to have been acquired before that day. Therefore the new licenses acquired under the new Management Plan will be pre-CGT assets. | Detailed Reasoning - Question 2:: For information on stamp duty and how it may apply, please contact your local State Revenue Office.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. If you have any concerns about this ruling you wish to discuss, you will find our contact details in the fact sheet. | Relevant facts: The Trust acquired licences before 20 September 1985. | A government organisation is moving to a new Management Act and associated new Management Plan. | The revocation of the old licenses is compulsory and current license holders will need to apply for a new license, as it will not occur automatically. | The rights attached to the new licenses will remain the same as the old licenses. | Each license authorises the holder to a number of units of entitlement. | Each license holder under the new Management Plan will maintain the same unit entitlements as the old Management Plan.