Private ruling: : Capital gains tax - cost base
Ruling period: Year ending 30 June 2011
Date scheme commenced: During 2001

Ruling: Q1: Is a deposit bond fee part of the cost base of the investment property? | A1: No.

Relevant facts and circumstances: You purchased an investment property using a deposit bond, which was necessary to proceed to property settlement. You obtained the deposit bond in 2001. A fee was payable in respect of the maximum bond amount. Detailed reasoning A deposit bond is considered to be a separate asset and therefore any costs in respect of it are not included in the cost base of the property. The cost incurred for the deposit bond forms part of the cost base of the deposit bond, being the relevant asset acquired, for capital gains tax purposes. Note: When settlement occurred the deposit bond lapsed and you had a capital loss equal to the fees incurred.

Relevant legislative provisions: Income Tax Assessment Act 1997 Subsection 110-25(2), | Income Tax Assessment Act 1997 Subsection 110-25(3), and | Income Tax Assessment Act 1997 Subsection 110-35(3)


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