Taxation Determination TD 93/170







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, 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 a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. The general position covering the capital gains consequences of non assessable distributions as they affect the calculation of the cost base of an asset is set out in TD 93/AA. Specific provisions relating to the impact of certain non assessable distributions (i.e. distributions attributable to deductions for capital expenditure on travel accommodation and on certain buildings and structural improvements; distributions from income that are exempt income because of section 124ZM or 124ZN; distributions from the consideration in respect of a disposal of shares in a PDF; and distributions from an amount that, because of section 159GZZZZE, is not included in assessable income) are included in subsection 160ZM(3A). | 2. The effect of subsection 160ZM(3A) is to exclude certain amounts from the calculation of the indexed cost base as required under paragraph 160ZM(2)(a) and subsection 160ZM(3) where non assessable distributions are received. Non assessable distributions generally reduce the indexed cost base of an asset. Amounts referred to in paragraphs 160ZM(3A)(a), (b), (c) and (d) do not reduce the indexed cost base of an asset. | 3. No adjustments are made under subsection 160ZM(3A) to non assessable distributions when calculating the reduced cost base of an asset. If a taxpayer claims a loss on the disposal of units in a unit trust, the reduced cost base is reduced by the full amount of any non assessable distributions. | Example: Units acquired on 1 July 1990 for $10,500 | Units sold on 30 September 1992 | Non assessable distribution of $9,000 received on 30 June 1992 which includes an amount of $3,000 attributable to a deduction allowed under Division 10C or 10D of Part IIIA. | Relevant indexation factors 30 September 1990 103.3 | A capital loss will arise if the sale price is less than $1,500. It should be noted that no reduction is made to the non assessable distribution in the calculation of the reduced cost base. | Commissioner of Taxation 2/9/93 | Previously issued as Draft TD 93/D132


Related rulings: TD 93/169 TD 93/171
Legislative references: ITAA 160ZM ITAA 160ZM(2)(a) ITAA 160ZM(2)(b) ITAA 160ZM(3) ITAA 160ZM(3A) ITAA 124ZM ITAA 124ZN ITAA 159GZZZZE
Subject references: Capital gains tax unit trust distributions