Capital Gain Tax | Taxation Law | Assignment

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Answer to Part 1:........................................................................................................................2
Answer to Part 2:........................................................................................................................3
References:.................................................................................................................................6

TAXATION LAW2
Answer to Part 1:
A capital gain tax can be defined as the set of rules which is mainly designed to
compute the gains which will would be taxed under the laws of income tax because of one of
53 CGT events. A capital gain happens when the proceeds following the disposal of asset
exceeds the costs of purchasing the asset (Lam and Whitney 2016). A capital gains or loss
happens under “sec 100-20 (1)” when the CGT events happens. A “CGT event A1” takes
place when the disposal of CGT asset happens under sec 104-10. The sale of CGT event
would usually happen when a contract is entered into by the taxpayer for sale.
According to the “sec 104-10(3) ITAA 1997” the time of CGT event upon the transfer
of CGT asset happens when the taxpayer forms an agreement or if there is no agreement, then
it involves when the change of ownership happened upon the settlement (Phan 2016).
Reference to “FCT v Sara Lee Household & Body Care P/L (2000)” can be made to
understand the time of CGT event. The factors include;
1. The applicable contract amounts to a source of obligation in performing the transfer
of assets that results in relevant sale.
2. If there is more than two contracts which forms the sources of obligation to execute
the transfer, there is need for judgement as which contracts is property to be viewed as
the source of obligation to create an impact on the disposal.
3. It is not possible to recognize the single agreement based on which the sale happened,
then the time represents when the change of ownership took place.
4. The date of purchase and sale of same CGT asset might not be same and does not
requires to be contemporaneous (Armstrong 2016).
5. The relevant time is when the contact is made and not when it became unconditional
or enforceable specifically.