Income tax: capital gains: when will a building which is relocated to pre-CGT land be treated as a separate asset under subsection 108-55(2) of the Income Tax Assessment Act 1997 ?

It will only be when the building was acquired post-CGT.

For subsection 108-55(2) of the Income Tax Assessment Act 1997 (ITAA 1997) to apply, the building must have been: (i) constructed on pre-CGT land (see TD 93/184) & (ii) acquired post-CGT.

Therefore, unless a building was acquired post-CGT, it would not be an asset separate from the land on which it stands for the purposes of subsection 108-55(2). Note: Any capital improvements on relocation will be treated as an asset separate from the land where the threshold tests in subsections 108-70(2) and (3) are satisfied. Example 1: X acquired a building on Block A in 1979. In 1999 X relocated the building from Block A to Block B which X acquired in 1984. The building is not a separate asset from Block B and retains its pre-CGT status. Example 2: Y acquired a building on Block C in 1988. In 2002 Y relocated the building from Block C to Block D which Y acquired in 1983. The building is treated as an asset separate to Block D and retains its post-CGT status.