Taxation Determination TD 2000/6




Examples: Example 1: Example 1 3. Before 20 September 1985, Gunther, a non-resident, purchased 1,000 shares (representing 2% of the share capital) in ABC Ltd (an Australian public company) for $1,000. Gunther died on 21 March 1999, leaving the shares in ABC Ltd to an Australian resident beneficiary. At that time the market value of the shares was $16,000. | Example 2: Example 2 4. Assume that the facts in Example 1 are unchanged, except that Gunther acquired the shares on 21 January 1990 for $5,000. Again, the shares held by Gunther are not CGT assets which have the necessary connection with Australia, but section 128-15 of the 1997 Act applies to the shares in the hands of the resident beneficiary. Note: 5. This Taxation Determination rewrites and replaces Taxation Determination TD 95/46. There is no material change in this Taxation Determination to the views expressed in TD 95/46 apart from updating it with the rewritten income tax law in the 1997 Act. 6. Parts 3-1 and 3-3, Division 104 and sections 128-15 and 136-25 of the 1997 Act, to which this Determination refers, express the same ideas, respectively, as Parts III, section 160L, 160X, subsection 160X(6) and paragraphs 160X(5)(a) and 160X(5)(b) and section 160T of the Income Tax Assessment Act 1936 . Commissioner of Taxation 19 January 2000 Previously issued as TD 1999/D50



This Taxation Determination is a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and is legally binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain when a Determination is a public ruling and how it is legally binding on the Commissioner. | This determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. Yes. If a CGT event later happens to the CGT asset, it is not relevant to the resident beneficiary that the asset, while it was in the hands of the non-resident person, lacked a necessary connection with Australia. From a resident's perspective, Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 ('the 1997 Act') apply to CGT events which happen to a CGT asset, whether situated in Australia or elsewhere or not situated anywhere (Division 104 of the 1997 Act). | 2. The resident beneficiary is taken to have acquired the CGT asset in accordance with subsection 128-15(2) of the 1997 Act. Parts 3-1 and 3-3 of the 1997 Act will apply to any later CGT event which happens to the CGT asset in the hands of the beneficiary.


Related rulings: TD 95/46
Legislative references: ITAA 1997 Part 3-1 ITAA 1997 Part 3-3 ITAA 1997 Division 104 ITAA 1997 Section 128-15 ITAA 1997 Section 136-25 ITAA 1936 Part IIIA ITAA 1936 Section 160L ITAA 1936 Section 160X ITAA 1936 Paragraph 160X(5)(a) ITAA 1936 Paragraph 160X(5)(b) ITAA 1936 Subsection 160X(6) ITAA 1936 Section 160T
Subject references: CGT asset having the necessary connection with Australia CGT event cost base date of acquisition effect of death deceased estates non-resident resident