Commentary on subdivision 108-D of ITAA 1997: separate CGT assets

Dabner, Justin (2006) Commentary on subdivision 108-D of ITAA 1997: separate CGT assets. In: Murray-Jones, Ian, (ed.) Australian Tax Practice. Thomson Legal and Regulatory, Pyrmont, NSW, Australia, - .

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[Extract] Subdivision 108-0 contains deeming provisions that operates to separate what the general law would regard as one asset into two or more assets for CGT purposes: s 108-50. Where Subdiv 108-0 applies, the principles of property law that whatever is affixed to the land becomes part of the land and an accessory thing when annexed to a principal thing becomes part of the principal thing are to be ignored for the purposes of CGT. Thus the effect of Subdiv 108-0 is that where it operates, the CGT provisions have to be applied separately to the "original" asset and to that part of the asset that is deemed to be a separate asset.

The primary significance of Subdiv 108-0 in practice is to bring certain post-CGT alterations and additions to pre-CGT land, buildings, structures and other assets, within the CGT provisions. Whilst the Subdivision can also apply to treat other assets and capital improvements to post-CGT assets as separate CGT assets the significance of this has been lessened by the substitution of the CGT discount for indexation.

The provisions essentially distinguish between additions and improvements to land and additions and improvements to other assets. Within the later category a distinction is drawn between post and pre-CGT assets. The commentary will, accordingly, adhere to this categorization.

Item ID: 3576
Item Type: Book Chapter (Research - B1)
ISBN: 978-0-86460-011-0
Keywords: taxation law, taxation law, Income Tax Assessment Act 1997
Date Deposited: 08 Dec 2009 03:53
FoR Codes: 18 LAW AND LEGAL STUDIES > 1801 Law > 180125 Taxation Law @ 100%
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