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14 Oct 10 TR 2001/12 (capital gains in pre-CGT tax treaties) withdrawn

On 13 October 2010, the ATO withdrew Taxation Ruling TR 2001/12 (Income tax and capital gains tax: capital gains in pre-CGT tax treaties) with effect from the same day.

The views expressed in the Ruling were rejected by the Federal Court in Virgin Holdings SA v FCT [2008] FCA 1503 and Undershaft (No 1) Limited v FCT [2009] FCA 41.

The Notice of Withdrawal (TR 2001/12W) states that the "Commissioner does not intend to replace the ruling given the diminishing significance of the issue due to the renegotiation of pre-CGT DTAs and the narrowing of the range of assets held by foreign residents that are subject to CGT following legislative changes enacted by the Tax Laws Amendment (2006 Measures No 4) Act 2006 with effect from 12 December 2006".

The Notice of Withdrawal continues: "The Commissioner will, where appropriate, apply the decisions in the Virgin Holdings and Undershaft cases in respect of similar matters involving entities making taxable capital gains under Part 3-1 of the ITAA 1997 which are residents of countries where a similarly worded pre-CGT DTA applies."


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