Taxation Determination

TD 93/82

Income tax: is roll-over relief available under section 160ZZK of the Income Tax Assessment Act 1936 where a taxpayer is forced to dispose of an asset due to an adverse change in the taxpayer's financial circumstances?

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FOI status:

may be releasedFOI number: I 1214858

1. No. The roll-over relief available under section 160ZZK only applies to an "involuntary" disposal brought about by the compulsory acquisition of the asset, or by the loss or destruction of, or damage to, the asset. While the taxpayer might consider such a disposal to be "involuntary", it did not result from a "compulsory acquisition".

2. "Compulsory acquisition" is defined in subsection 160ZZK(7C) to mean the compulsory acquisition of an asset by the Australian government or by an Australian government authority. (This includes a mutually negotiated disposal of an asset where the government or government authority reserves a right of compulsory acquisition. It also applies to situations where a taxpayer receives a payment for the non-renewal of a Crown lease).

Example :

A taxpayer acquires a block of land and plans to construct a building on it. The taxpayer loses his job and can no longer afford to proceed with the plan. He then decides to sell the land.

Roll-over relief is not available under section 160ZZK to the taxpayer in respect of the disposal of the land in these circumstances.

Commissioner of Taxation
6/5/93

Previously issued as Draft TD 93/D2

References

ATO references:
NO CHA/DW/11/81 (CGTDET67)

Related Rulings/Determinations:

CGT15, now TD 15

Subject References:
Australian government;
compulsory acquisition;
involuntary disposal;
roll-over

Legislative References:
ITAA 160ZZK;
ITAA 160ZZK(7C)