Taxation Determination

TD 1999/57

Income tax: capital gains: if marriage breakdown roll-over applies to a transfer of a CGT asset between spouses, what expenses of the transferor become the first element of the transferee's cost base of the asset under paragraph 126-5(5)(a) of the Income Tax Assessment Act 1997?

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

FOI status:

may be releasedFOI number: I 1020774

Preamble
This Taxation Determination is a 'public ruling' for the purposes of Part IVAAA of the Taxation Administration Act 1953 and is legally binding on the Commissioner. Taxation Rulings TR 92/1 and TR 97/16 together explain when a Determination is a public ruling and how it is legally binding on the Commissioner.
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. Costs of transfer (conveyancing fees, stamp duty, etc.) of a CGT asset transferred between spouses because of a court order under the Family Law Act 1975 are included in the cost base of the transferor (paragraph 110-25(3)(b)) which, by subsection 126-5(5), becomes the first element of the transferee's cost base.

2. The transferor's general legal costs of the marriage breakdown property settlement do not satisfy the cost base rules in Division 110 of the Income Tax Assessment Act 1997 (ITAA 1997).

Note

3. Under subsection 126-5(5) of the ITAA 1997, if a CGT asset is transferred between spouses because of a court order under the Family Law Act 1975, the first element of the asset's cost base in the hands of the transferee is the asset's cost base in the hands of the transferor at the time the transferee acquired it. The first element of the asset's reduced cost base (if applicable) is calculated similarly.

Commissioner of Taxation
3 November 1999

Previously issued in draft form as TD 1999/D83

References

ATO references:
NO 99/19509-6
BO CGT marriage breakdown summit 1999

ISSN 1038 - 8982

Subject References:
asset
CGT asset
CGT event
cost base
first element
marriage breakdown
property
property settlement
reduced cost base
spouse
roll-over
transfer
transferee
transferor

Legislative References:
ITAA 1997 Div 110
ITAA 1997 110-25(3)(b)
ITAA 1997 126-5(5)
ITAA 1997 126-5(5)(a)

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