CGT Determination Number 23

TD 23

Capital Gains: Can incidental costs incurred after an asset is disposed of form part of the cost base of the asset?

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FOI status:

may be releasedFOI number: I 1019133

1. A capital gain or loss arises in the year in which a taxpayer disposes of an asset. The cost base of an asset includes incidental costs to the taxpayer in respect of the acquisition or disposal of the asset.

2. Incidental costs are defined in subsections 160ZH(5) and (7) as expenses incurred in connection with the acquisition or disposal. There is no requirement that the calculation of the cost base be limited to expenditure incurred before the time of disposal.

Example:

A taxpayer contracts to sell a post-CGT block of land on 23 June 1990. Legal and professional costs of $500 are incurred in July 1990 on settlement . Such incidental costs of $500 are included in the cost base of the land .

Commissioner of Taxation
31 October 1991

References

ATO references:
NO CGT Cell

Subject References:
Incidental costs,
Cost base.

Legislative References:
160ZH(5) and
(7)