Taxation Determination

TD 2000/37

Income tax: capital gains: for the purposes of Subdivision 124-B of the Income Tax Assessment Act 1997 , can you purchase a replacement CGT asset before an Australian government agency has given you a formal notice of intention to compulsorily acquire a CGT asset?

Please note that the PDF version is the authorised version of this ruling.

FOI status:

may be releasedFOI number: I 1022870

Preamble

The number, subject heading, date of effect and paragraph 1 of this Taxation Determination are a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and are legally binding on the Commissioner. The remainder of the Determination is administratively binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain how a Determination is legally or administratively binding.

Date of effect

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. Paragraph 124-70(1)(c) of the Income Tax Assessment Act 1997 does not require that you purchase a replacement CGT asset after you receive the notice. It requires that you dispose of the original asset to an Australian government agency after the notice was served on you.

2. The timing requirements for roll-over under Subdivision 124-B are set out in subsection 124-75(3). They do not require that a notice be received before any acquisition of the replacement CGT asset. Under paragraph 124-75(3)(a), you can incur expenditure in acquiring a replacement CGT asset no earlier than one year before the original asset was compulsorily acquired (or within such further time as the Commissioner allows in special circumstances).

3. In this Taxation Determination a 'replacement CGT asset' is another CGT asset you incur expenditure in acquiring if you receive money for one of the roll-over events in subsection 124-70(1) happening to a CGT asset: see section 124-75.

Commissioner of Taxation
13 September 2000

Previously issued as TD 1999/D54