LAWCOMM 403 long notes.docx-CONTENTS Tip...
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
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LAWCOMM 403 long notes.docx-CONTENTS Tips ...........
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
LAWCOMM 403 long notes.docx-CONTENT...
LAWCOMM_403_long_notes.docx-CONTENTS Tips ......................................................................................................................................................................................... 4 Introducon ............................................................................................................................................................................
Page 77
An amount derived from disposing of land is income if the taxpayer (
secon CB 9(1)
):
o
disposed of the land within 10 years of acquiring it; and
o
carried on a business of dealing in land at the me she acquired the land
Note the following:
o
This secon applies whether the land was acquired for the purpose of the business or not
o
This secon applies where either:
the taxpayer carries on the business and acquires and disposes of the land; or
the taxpayer acquires and disposes of the land and some associate of the taxpayer carries on the
business
– if this rule were not in existence, taxpayers could collude to avoid tax by seng up a
company or another person, which would buy the land then sell it
o
There are exclusions for:
residenal land occupied by the taxpayer or her family (
secon CB 16
)
business premises occupied by the taxpayer (
secon CB 19
)
o
There is no exclusion of capital receipts
DISPOSAL WITHIN 10 YEARS – LAND DEVELOPMENT OF SUBDIVISION BUSINESS
An amount derived from disposing of land is income if the taxpayer (
secon CB 10
)
o
disposed of the land within 10 years of acquiring it; and
o
at the me she acquired the land, carried on a business of developing land or dividing land into lots.
Note the following:
o
This secon applies whether the land was acquired for the purpose of the business or not
o
This secon applies where:
the taxpayer carries on the business and acquires and disposes of the land; and
the taxpayer acquires and disposes of the land and some associate of the taxpayer carries on the
business.
o
There are exclusions for:
residenal land occupied by the taxpayer or her family (
secon CB 16
)
business premises occupied by the taxpayer (
secon CB 19
)
o
There is no exclusion of capital receipts
DISPOSAL WITHIN 10 YEARS OF IMPROVEMENT – BUILDING BUSINESSES
An amount derived from disposing of land is income if the taxpayer (
secon CB 11
)
:
o
disposes of the land within 10 years of compleng improvements on it; and
o
carried on a business of erecng buildings at the me she began the improvements.
Note the following:
o
This secon applies whether the land was acquired for the purpose of the business or not
o
This secon applies where:
the taxpayer carries on the business and acquires and disposes of the land; and
the taxpayer acquires and disposes of the land and some associate of the taxpayer carries on the
business.
o
There are exclusions for:
residenal land occupied by the taxpayer or her family (
secon CB 16
)
business premises occupied by the taxpayer (
secon CB 19
)
o
There is no exclusion of capital receipts
SCHEMES FOR DEVELOPMENT OR DIVISION BEGUN WITHIN 10 YEARS
An amount derived from disposing of land is income if (
secon CB 12
)
o
there is an undertaking or scheme; and
o
the undertaking or scheme involves the development of the land or the division of the land into lots; and
o
the taxpayer, or someone for the taxpayer, carries on development or division work; and
o
the development or division work is not minor; and
o
the undertaking or scheme is begun within 10 years of when the taxpayer acquired the land.
Note the following:


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