Taxation Law

Running head: TAXATAION LAW
Taxation Law
Name of the Student
Name of the University
Author Note

1TAXATION LAW
Answer 1
Transaction 1
The issue arising from the facts of the situation is the CGT consequences of the antique
painting purchased by Helen's father for a price of $4000 on February 1985 and disposed off
for a price of $12,000 on December 2018.
Antique objects are treated as collectibles as well as a CGT asset as provided u/s 108.10 of
ITAA 97. As per the provisions contained u/s 102.2 of the ITAA 97, a CGT gain or loss is
said to have occurred only when a CGT event has taken place u/s 104.5 of the ITAA 97. Any
CGT asset when disposed off by way of sale gives rise to a CGT event of A1 category u/s
104.10 of the ITAA 97. The point of time at which an asset is regarded as being acquired is
the time when the taxpayer is conferred with the ownership of the property as per the
provisions u/s 109.5 of the ITAA 97. Again any CGT asset that has been acquired before 20th
of September 1985 will be treated as a pre-CGT asset and will be excluded from the
computation of CGT liability. Moreover, it needs to be treated as an exemption while
computing the CGT liability. Any asset purchased on a date after the prescribed one will be
treated as a collectible, if has been held for personal enjoyment by the owner. In the present
case, Helen’s father has purchased the property in February of the year 1985. In this case the
painting has been acquired prior to the prescribed date and will be required to be treated as an
exemption from the computation of CGT liability.
Hence the painting purchased by Helen’s father when sold by Helen will not be permitted
as a CGT liability as the same has been bought prior to the introduction of CGT.

2TAXATION LAW
Transaction 2
The issue arising from the present scenario is consequences of the sale of the historical
sculptor by Helen on 1st of January 2018 which has been acquired on a date of December
1993.
U/s 108.10 of the ITAA 97 any item that has been held by the taxpayer for being used in a
personal capacity and for the purpose of personal enjoyment will be required to be treated as
a collectible. This will include any artwork, antique, jewellery or any other similar objects
that has been held by a taxpayer. Any transaction relating to such an asset will be treated as a
CGT event u/s 104.5 of the ITAA 97. Any CGT asset when sold or disposed of gives rise to a
CGT event and will be categorised as an A1 CGT event u/s 104.10 of the ITAA 97. The point
of time at which an asset is regarded as being acquired is the time when the taxpayer is
conferred with the ownership of the property as per the provisions u/s 109.5 of the ITAA 97.
In this case that acquisition of the property has been effected in December 1993. This makes
the object post-CGT asset and the sale of the same can be said to be a CGT event of A1
category. While computing the CGT liability of the same the cost base will be the acquisition
price that is $6000. In this respect the capital proceeds will be $5,500. The CGT gain will be
computed by deducting the capital proceed by the cost base. Hence, the total CGT gain will
be $500. This gain will be e treated as a CGT gain and will be included in the CGT liability
of the taxpayer.
The sale of the historical sculpture treated as a CGT gain accrued from sale of a
collectible.
Transaction 3
The issue arising from the present scenario is consequences of the sale of the antique
jewellery by Helen on March 2018 which has been acquired on October 1987. U/s 108.10 of