Issue
Did a CGT event happen under Division 104 of the Income Tax Assessment Act 1997 (ITAA 1997) when a NSW registered club acquired the initial allocation of a poker machine entitlement under paragraph 15(1)(b) of the Gaming Machines Act 2001 (NSW)?
Decision
No. There was no CGT event under Division 104 of the ITAA 1997 when the registered club acquired the initial allocation of a poker machine entitlement, under paragraph 15(1)(b) of the Gaming Machines Act.
Facts
Prior to the commencement of the Gaming Machines Act, registered clubs in NSW were authorised to keep poker machines on their premises under the Registered Clubs Act 1976 (NSW). On the commencement of the Gaming Machines Act, an initial allocation of poker machine entitlements was made under paragraph 15(1)(b) of that Act. One poker machine entitlement was allocated for each approved poker machine that comprised the frozen number of approved poker machines for each registered club as determined by the Liquor Administration Board. Furthermore, the savings provisions in Schedule 1 of the Gaming Machines Act carried over the 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 on the premises of a registered club, for which a poker machine entitlement was allocated, were effectively carried over from the Registered Clubs Act to the Gaming Machines Act. This was facilitated by paragraph 15(1)(b) and the savings provisions in Schedule 1 of the later statute.