Effect of CGT on Sale of Antique Items

Question 1
Part 1
This case is concerned with determining the monetary gain outcomes of the sale of antique piece
of painting sold by Helen.
This piece of painting will be considered as one collectible item as well as an asset for
monetary gain as per the provisions in section 108-10(2) Income Tax Assessment Act 1997. As
stated in the section 102.2, CGT will be imposed only on instance of occurrence of a CGT event
as stated in the section 104-5. Sales as well as disposal of any CGT asset will be taken up as a
CGT event AI under considerations of the section 104-10(1). The time for the acquisition of the
asset is to be considered as the time when the ownership of the asset lies with the Taxpayer, as
per the provisions in the section 109-5(1).
By the statement of the facts it can be made clear that the painting had been acquired by
Helen as the same was actually purchased by father of Helen. The painting can fall under the
category of CGT exemption and would be considered as a pre CGT asset in case if the purchase
was done before 28th September 1985 (Barkoczy 2016). In case of the acquisition done after the
mentioned date it would be considered as collectible. Section 110.25(2) element 1 describes cost
price as the acquisition price which in this case is $4,000. The painting was either inherited or
received as gift by Helen. As given under the section 112.20 of the Act the change in CB would
be with regard to market price of the painting on the acquisition date. Here CP= selling price of
painting ($12,000) as per provisions of section 116.20. CG = CP-CB. Under the division 115 of
the Act for holding the asset for more than one year Helen would be liable for receiving 50%
discount.

Part 2
Determining the effect of CGT for the sale of the sculpture is the main issue here.
The sculptor was purchased for $5,500 and sold for $6,000 by Helen. As per the section
108.10 (2) of ITAA the sculptor can be describe as collectible. In case of a CGT event the CG or
CL would be correspondent to it as per section 102.20 of the Act. In correspondence with the
table provided under section 104.5 the option of CGT can be seen to be counted in case of a CGT
event. Similarly a CGT event A1 can be seen resulting in case of the disposal of the sale of assets
of CGT as provided section 104.10(1) and in case of the transfer of asset the role of the owner is
taken by taxpayer under section 109.5(1).
The sculpture was seen to be acquired on December 1993 by way of purchasing and can
be described as post-CGT asset and would be accountable for A1 event of CGT under section
104.10(1). In this case E1 CB= Sculptor’s selling price ($5,500) as mentioned in section
110.25(2) of ITAA.
Part 3
Identifying effect of CGT by sale of a piece of antique jewellery by Helen is the main
issue in this case.
The jewellery was bought on October 1987 for $14,000 and sold on 20th March 2018 for
$13,000 by Helen and can be described as a collectible under the section 108.10(2) of the Act. In
case of a CGT event the CG or CL would be correspondent to it as per section 102.20 of the Act.
In correspondence with the table provided under section 104.5 the option of CGT can be seen to
be counted in case of a CGT event. Similarly a CGT event A1 can be seen resulting in case of

the disposal of the sale of assets of CGT as provided section 104.10(1) and in case of the transfer
of asset the role of the owner is taken by taxpayer under section 109.5(1).
By the facts mentioned the purchase had been made by Helen for $14,000 on October
1987 and can be mentioned as post-CGT asset. As per the date of sale the jewellery it can be
described as event A1 of CGT under section 104.10(1). Here CB=$14,000 and CP= $13000.
CG= CP-CB= $13,000-$14,000= $-1,000, negative amount shows loss. The loss is said to be
setting off against gains for collectibles and would be put forward in next year.
Part 4
Identifying the effect of CGT on the sale of picture by Helen can be said as the issue in
this case.
The picture was bought by Helen’s mother at $470 and was sold by Helen on January 1st
2018 for $5,000 and would be seen as collectible as well as CGT asset as mentioned under
180.10(2) of the ITAA. In case of a CGT event the CG or CL would be correspondent to it as per
section 102.20 of the Act. In correspondence with the table provided under section 104.5 the
option of CGT can be seen to be counted in case of a CGT event. Similarly a CGT event A1 can
be seen resulting in case of the disposal of the sale of assets of CGT as provided section
104.10(1) and in case of the transfer of asset the role of the owner is taken by taxpayer under
section 109.5(1).
By the facts present it cannot be determined if the picture was received by Helen before
or after 20th September 1985. If the picture is seen to be received before the mentioned date it
would be a pre-CGT asset and if received after the mentioned date it would be regarded as