Taxation Determination
TD 93/44
Income tax: capital gains: what is the amount of the consideration in respect of the disposal of an asset by a taxpayer where consideration is actually received but an amount is later paid out by way of damages?
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FOI status:
may be releasedFOI number: I 1214417|
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). [Note: This is a consolidated version of this document. Refer to the Tax Office Legal Database (http://law.ato.gov.au) to check its currency and to view the details of all changes.] |
1. The consideration in respect of the disposal of the asset is the amount in fact received or entitled to have been received by the taxpayer (subsection 160ZD(1) of the Income Tax Assessment Act 1936). This consideration is not adjusted by any amount that the taxpayer may be required to pay out later in satisfaction of a damages claim brought on by the purchaser.
2. This Determination does not apply to the calculation of capital proceeds from CGT events under the Income Tax Assessment Act 1997 that happen after the beginning of the 1998-99 income year. However, it continues to apply to disposals of assets under the Income Tax Assessment Act 1936 occurring before the beginning of the 1998-99 income year.
Example:
James disposes of a painting to Paul for $10,000.
Paul later determines the true value of the painting to be $7,000 and successfully brings an action for misrepresentation against James for $3,000 damages.
The consideration on disposal of the painting is $10,000.
Commissioner of Taxation
25 March 1993
References
ATO references:
NO BXH0020 (CGTDET55)
Related Rulings/Determinations:
TD 93/43
TD 93/45
Subject References:
consideration
damages
disposal of asset
Legislative References:
ITAA 160ZD(1)
ITAA 160ZF
ITAA 1997
| Date: | Version: | Change: | |
| 25 March 1993 | Original ruling | ||
| You are here | 1 July 1998 | Consolidated ruling | Addendum |
| 28 October 1998 | Withdrawn |