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23 May 1111 Government payment for groundwater bore licences subject to CGT - Carberry

The AAT has held that a payment received by the taxpayer from the New South Wales Government, described in a brochure published by the NSW Department of Land and Water Conservation as “financial assistance to help licence holders adjust to changes in groundwater access over the ten years of the Water Sharing Plan”, was neither ordinary income nor a bounty or subsidy within s 15-10 ITAA 1997.

However, CGT event C2 occurred when the groundwater bore licences were "replaced" two years after the time of the payment. The taxpayer's objection against an assessment including the payment in the taxpayer's assessable income in the year of payment was allowed in full: Carberry and FCT [2011] AATA 303 (AAT, Frost SM, 10 May 2011).


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