If local council is resuming investment property for open spaces – is cgt still applicable. Have owned property since 1992[blink]
Not sure, but guess it would be if you are forced to sell at a profit????
Out of interest, are they paying you true market rates for the land?
Terryw
Discover Home Loans
Parramatta
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Hi Harry,
Looks like you will be up for CGT – I copied and pasted the relevant section from the CGT Guide.
CHAPTER 7
Loss, destruction or compulsory acquisition of an asset.This chapter explains your capital gains tax (CGT) obligation if your CGT asset is lost, destroyed or compulsorily acquired.
Generally, there is no CGT obligation for assets acquired before 20 September 1985 (pre-CGT). If you choose to take rollover, you do not need to lodge a written election stating your choice – it will be clear from the way you prepare your tax return.
You cannot choose to defer a capital loss but you can use it to reduce any capital gain made in the current income year or a later year.
For rollover relief to apply, the replacement asset you receive cannot be a car, motor cycle or similar vehicle. Further, from 1 July 2001, for rollover relief to apply, the replacement asset you receive cannot become an item of your trading stock nor can it be a depreciating asset.
TIME OF THE CGT EVENT
You need to know the time of a CGT event to work out in which income year a capital gain or capital loss affects your income tax.If an asset is lost or destroyed and you receive compensation, the time of the CGT event is when you first receive the compensation.
If you do not receive any compensation, the time of the CGT event is when the loss is discovered or the destruction occurred.
If an Australian government agency compulsorily acquires your asset, the time of the CGT event is when you first received compensation from the agency, or the agency enters the asset (for example, land) or takes possession of it.
If an Australian government agency acquires your asset following negotiation (rather than compulsorily acquiring it) the time of the CGT event is the date the contract to acquire it is made, or the date of the change of ownership if there is no contract.
If a lease that had been granted to you by an Australian government agency expires and is not renewed, the time of the CGT event is when the lease expires.
Derek
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