Draft Taxation Determination

TD 1999/D55

Income tax: capital gains: is roll-over available under Subdivision 124-B of the Income tax Assessment Act 1997 for the loss or destruction of a CGT asset if an asset is damaged?

• Please note that the PDF version is the authorised version of this draft ruling.
  This document has been finalised by TD 2000/38.

FOI status:

Preamble

1. No. Loss or destruction does not include damage. Subdivision 124-B of the Income Tax Assessment Act 1997 does not apply to a damaged CGT asset unless the damage done to the asset is so extensive that the asset or a discrete part of the asset can be considered lost or destroyed.

Example 1:

2. The keel of a yacht is destroyed. The yacht is damaged, though not destroyed. However, the keel, as a discrete part of the yacht, is destroyed and roll-over is available.

Example 2:

3. A holiday home is totally reduced to rubble as a result of a tropical cyclone. Roll-over is available for the destruction of the home. However, if only part of the house is damaged during the cyclone, roll-over is not available because the house has not been destroyed.

Your comments

We invite you to comment on this Draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period.

Commissioner of Taxation
4 August 1999

References

ATO references:
NO 99/10859-2
BO CGT Involuntary Disposal summit 1999

Subject References:
Asset
CGT asset
damage
destruction
loss
roll-over

Legislative References:
ITAA 1997 Subdivision 124-B