Published on 06 Oct 06
by VICTORIAN DIVISION, THE TAX INSTITUTE
In 1968 Professor Stone listed as one of a number of “apparently meaningless categories” what he called “the distinction over an unusually penumbral area between capital and income”. That uncertainty continues and now affects property investors and developers both in an income tax/CGT context, and also in a GST context. This paper examines the current issues affecting property investors and developers, with a view to providing some certainty and clarity in an increasingly difficult area. Issues covered include:
- distinguishing income from capital for small scale developments - a new take on an age-old theme
- how long does it take before a profit or gain is taxed on capital account?
- what is the number or scale of developments required before a gain is taxed as ordinary income?
- the practical implications of land becoming trading stock
- interaction issues between the income tax/CGT position and GST.
Lachlan is the leader of KPMG’s Indirect Tax practice
in China and a member of KPMG’s Global Indirect Taxes leadership
team. He was formerly a director of The Tax Institute, and leader of
KPMG’s Indirect Taxes and Tax Controversy practices in Australia
prior to his relocation to China in 2011. In his current role, Lachlan is
assisting multinational companies transition to VAT in China. He is a
frequent presenter and media commentator on VAT issues in China,
and is currently advising China’s Ministry of Finance and State
Administration of Taxation on several tax reforms, including VAT and
- Current at
27 August 2012