ATO Interpretative Decision
ATO ID 2004/163 (Withdrawn)
Capital gains tax: CGT asset - carbon sequestration right
FOI status: may be released
Status of this decision: Decision withdrawn 5 May 2017.
|CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.|
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Is a carbon sequestration right, as defined in section 87A of the Conveyancing Act 1919 (NSW) (the Conveyancing Act), a CGT asset, as defined in section 108-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Yes. A carbon sequestration right, as defined in section 87A of the Conveyancing Act, is a CGT asset, as defined in section 108-5 of the ITAA 1997.
A taxpayer enters into a contract with a New South Wales landowner for the acquisition of a carbon sequestration right as defined in section 87A of the Conveyancing Act.
Reasons for Decision
Subsection 108-5(1) of the ITAA 1997 defines a CGT asset as:
- any kind of property; or
- a legal or equitable right that is not property.
A carbon sequestration right is defined in section 87A of the Conveyancing Act as follows:
carbon sequestration right in relation to land, means a right conferred on a person by agreement or otherwise to the legal, commercial or other benefit (whether present or future) of carbon sequestration by any existing or future tree or forest on the land after 1990.
A carbon sequestration right is thus a legal right and falls within the definition of CGT asset in subsection 108-5(1) of the ITAA 1997.
[Note: The same principle applies to all statutory carbon sequestration rights under the legislation applying in the various Australian States.]
Date of decision: 9 February 2004
|Year of income:||Year ended 30 June 2004|
Income Tax Assessment Act 1997
Conveyancing Act 1919 (NSW)
Related ATO Interpretative Decisions
ATO ID 2004/171
ATO ID 2004/172
Capital gains tax
Siebel/TDMS reference number: 3909130; 1-5IQ22AR; 1-AXQRC4V
Business line: Private Groups and High Wealth Individuals
Date of publication: 20 February 2004
Date reviewed: 24 June 2014
|ATO ID 2004/163 (Withdrawn) history