19 Nov 07 Taxpayer liable on capital gain - KarapanagiotidisThe AAT has held that a taxpayer was liable in respect of a capital gain derived on the sale of vacant land, albeit that the amount of the capital was reduced slightly on recalculation by the Commissioner from $53,750 to $48,293.
The date of purchase of the property was in issue as a consequence of s 110-25(4) of ITAA 1997, which allowed for additions to the cost base for the non-capital costs of ownership of a CGT asset (but only if it was acquired the asset after 20 August 1991). The AAT held that the property was purchased on 25 November 1989. Further, the AAT rejected the taxpayer's argument that Div 152 ITAA 1997 applied, on the basis that the property was not an active asset. The AAT held that the property was left as vacant land during the whole of the period of ownership by the taxpayer. Finally, the AAT rejected the taxpayer's submissions in relation to the remission of the 25% penalty imposed by the Commissioner for failing to take reasonable care: Karapanagiotidis and FCT  AATA 1961 (AAT, Pascoe SM, 16 November 2007).
For a copy of the decision, go here