Compare documents

1 Will a CGT event happen to you when Property A is partitioned and legal title to the subdivided lots (53A and 53B) is transferred from the existing owners to the new owners?

Yes. CGT event A1 occurs where there has been a change in ownership of an asset. The CGT event happens when your interest in the joint title is transferred to the other party and vice versa. As a result of the CGT event, each party will have sole ownership of their agreed parcel of subdivided land with each owner having been taken to have disposed with their interest in the subdivided block. See for example, Taxation Determination TD 92/148. Question 2 Will the time of the CGT Event be at the date of acquisition? Answer Yes. The time of the event is when you enter into the contract for the disposal of your share in the joint title with the other party. At the time of acquisition, you entered into a contract with the other party to subdivide the property into 2 agreed parcels. This ruling applies for the following periods : Year ended 30 June 20XX Year ended 30 June 20XX Year ended 30 June 20XX Year ended 30 June 20XX The scheme commences on: XXX 20XX

In XXX 20XX You and the other party, jointly purchased the Property for a total cost of $XX. The legal title to the entire property was acquired in the following proportions: Party A - 50% You - 25% You - 25% At the time of Purchase the intention was that Party A would own the front portion of the land, and You would occupy the back portion of the land. To this end, You and the other parties asked a real estate agent to value each section of the Property. At Settlement, the parties then contributed agreed values to the purchase of the Property, with the intention that they would be able to subdivide the property into the agreed parcels. At this time, the parties had a contract to this effect. The process has commenced to subdivide the Property into 2 separate titles. Once the title has been subdivided, the intention is to 'partition' the property such that: •                    You will become the sole owner of one lot and •                    Other parties become the owners of the other lot. Assumptions For this ruling, it is assumed that the following will occur for the period of this ruling: • The subdivision has been undertaken and completed. •

The change of ownership has occurred.

Income Tax Assessment Act 1997 Part 3-1 Income Tax Assessment Act 1997 Subsection 104-10(2) Income Tax Assessment Act 1997 Section 116-30