Published on 01 Jul 13
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
To enable the transportation of electricity, gas and water over land in Australia, the transporting company generally requires an easement over the land on which the transportation occurs. Such easements may be granted by the landholder or may be compulsorily acquired. This article reviews the application of capital gains tax and goods and services tax to easements granted and easements compulsorily acquired, and develops a framework to provide guidance to landholders and their professional advisers as to the imposition of CGT and GST.
The author concludes that the CGT treatment will vary depending on whether the easement is freely granted or compulsorily acquired. Goods and services tax is likely to apply to consideration received for the granting of an easement or option in relation to an easement, whereas, with compulsory acquisitions of easements, as no supply will be made by the landholder in most cases, there will be no liability to GST.