Single Product

2019 March Case Study – Capital vs Revenue Argument

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Presented by Sean Pearce, this 90 minute tax training session took place in March 2019.

Whether a profit is on capital or revenue account can have material implications for your client, not only whether the CGT discount can be used, but whether other CGT concessions or rollovers can be applied to reduce or disregard the profit.  Furthermore, where losses are incurred, revenue losses are effectively worth twice as much as capital losses and can be utilised against all types of income, as distinct from capital losses that are restricted for use against capital gains.  This session will deal with the issues to be considered when determining whether a profit, or a loss, made by your client should be treated on either capital or revenue account, focussing not only on the historical case law in Whitfords Beach, but more recent cases such as:

  • August (where a TP who renovated and leased out commercial premises was held to have made a revenue gain on the sale of the premises);
  • Greig (where the TP’s losses of $11m on the sale of shares was held to be on capital account); and
  • Ransley (where the TP’s share transactions were taken to be on revenue account and not able to use either the CGT rollovers nor the CGT Discount on any profits).

The session will focus on both share and property acquisitions and disposals and will consider the key questions to ask when determining whether the asset is held on capital or revenue account and the actions your client can take to support that position.

**This session will qualify for 1.5 hours Structured CPD/CPE for CPA, CAANZ, IPA and Tax Institute members**


This download contains the following files:

The PowerPoint presentation (Microsoft Office 2010)

The Notes for the case study (PDF)

The solutions for the case study (PDF)

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