Income tax: capital gains: is a court an entity for the purposes of CGT event D1 (about creating contractual or other legal or equitable rights in you) in sections 104-35 and section 109-5 of the Income Tax Assessment Act 1997 ?

No.

The term 'entity' is defined in section 960-100 of the Income Tax Assessment Act 1997 to mean an individual, a body corporate, a body politic, a partnership, any other unincorporated association or body of persons or a trust.

A court is not a body corporate, a body politic, or an individual (see Kizon v. Palmer (1997) 142 ALR 488 at 505). So, a court is not an 'entity' as that term is used in section 104-35 (CGT event D1) and the acquisition rules in section 109-5.

The importance of this issue is for the application of the general acquisition rules in Division 109 in Part 3-1. If a court were an entity it could create rights in another entity and that entity would acquire the rights in accordance with subsection 109-5(2) and event number D1.

We invite you to comment on this Draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period. Comments by Date: 24 September 1999 Contact officer details have been removed following publication of the final ruling.