Holding Costs for CGT

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Taxduck · Answer

I would suggest not. I assume land acquisition was post 20 September 1985. Under the inheritance of assets the guidelines are. 'If the deceased acquired the asset on or after 20 September 1985, the first element of your cost base is generally what the deceased's cost base for the asset was on the day they died.' Cost base of inherited assets | Australian Taxation Office (https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/inherited-assets-and-capital-gains-tax/cost-base-of-inherited-assets#ato-Assetacquiredbydeceasedafter20September1985) So the acquisition date (element 1 of cost base) is the date the land was purchased. As this was pre 20 August 1991 then element 3 costs would not be included in the cost base. The ATO guidelines are confusing as under element 3 in link below states - ' you don't include these costs if you acquired the asset before 21 August 1991.' Cost base of assets | Australian Taxation Office (https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt/cost-base-of-asset#CostBaseElement3) So you could argue that the remaining 50% share of the asset was acquired on the date of death (1993). However under the CGT rules for deceased assets, the date the asset was acquired is the deceased's acquisition date which is pre-20 August 1991. You may find a differing opinion. It may be worthwhile asking the ATO for further advice. Early engagement for advice | Australian Taxation Office (https://www.ato.gov.au/about-ato/ato-advice-and-guidance/ato-advice-products-rulings/early-engagement-for-advice)

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