Issue
Did a CGT event happen under Division 104 of the Income Tax Assessment Act 1997 (ITAA 1997) when a NSW hotelier acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(a) of the Gaming Machines Act 2001 (NSW)?
Decision
No. There was no CGT event under Division 104 of the ITAA 1997 when the hotelier acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(a) of the Gaming Machines Act 2001 (NSW).
Facts
Prior to the commencement of the Gaming Machines Act 2001 (NSW) (Gaming Machines Act), hoteliers in NSW were authorised to hold poker machines under the Liquor Act 1982 (NSW) (Liquor Act). On the commencement of the Gaming Machines Act, an initial allocation of poker machine entitlements was made under paragraph 15(1)(a) of that Act. One poker machine entitlement was allocated for each approved poker machine that comprised the frozen number of approved poker machines for a hotel as determined by the Liquor Administration Board. Furthermore, the savings provisions in Schedule 1 of the Gaming Machines Act carried over existing gaming machine approvals and authorisations, and existing gaming-related licences.
Reasons for Decision
Legal rights fall within the definition of 'CGT asset' at subsection 108-5(1) of the ITAA 1997. The rights pertaining to each approved poker machine, kept in a hotel, for which a poker machine entitlement was allocated, were effectively carried over from the Liquor Act to the Gaming Machines Act. This was facilitated by paragraph 15(1)(a) and the savings provisions in Schedule 1 of the latter statute. Note: the above analysis also applies where a NSW registered club acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(b) of the Gaming Machines Act. Note: Paragraphs 15(1)(a) and 15(1)(b) of the Gaming Machine Act have been repealed by the Clubs, Liquor and Gaming Machines Legislation Amendment Act 2011. This repeal does not have any impact on the outcome of the ATO ID to the extent as how the CGT provisions of the ITAA 1997 operate in relation to the initial allocation of poker machine entitlements under the Gaming Machine Act.
Amendment History
Date of Amendment Part Comment 8 July 2016 Issue, Decision, Facts, Minor punctuation amendments Reason for Decision Minor punctuation amendments. Add Note regarding paragraphs of the Gaming Machine Act 2001 (NSW) which have been repealed
Date of Amendment | Part | Comment
8 July 2016 | Issue, Decision, Facts, | Minor punctuation amendments
Reason for Decision | Minor punctuation amendments. Add Note regarding paragraphs of the Gaming Machine Act 2001 (NSW) which have been repealed