在特定情況下，土地細分是必須考慮的基本方面。土地分割不會改變新形成的土地塊的年齡、購買日期或成本基數。根據新的土地細分規模，可以分配原土地的成本。根據法律，如果土地具有pre – CGT狀態，細分並不會改變其狀態(Faccio and Xu, 2015)。土地細分銷售的結果是一個重要的理解，以決定它是一個收入或資本。例如，對於房地產經紀人來說，土地細分主要是爲了商業目的，因此它被視爲他的收入。
此外，當子部門由代理或賣方完成時，該代理或賣方是常規業務的活躍交易方，屬於收入類型(Woellner et al.， 2016)。
As per the given case scenario, focus is on the tax implications that arise because of sale of sub-divided agricultural land in accordance with the Tax Laws of Australia. To completely understand the implications of taxes in Australia, the land purchase related costs as well as the cost associated with its sale, both are taken into account. The scrutiny of the details of capital gains taxation laws and the categories of exemption as applicable in Australia is also conducted. The methods used by tax payers to claim exemptions are discussed along with the interests accrued as the income of another category is also explored.
Points to Be Considered for Tax Implications:
According to the Australian taxation law, the capital gain denotes the gains accrued by the sale of some type of capital asset. The income tax statements include the capital gains taxes. The ‘cost base’ from the original sales proceeds is removed to calculate the capital gains. In the case where the sale proceedsexceedthe cost base then the capital gainsare said to occur, which attracts the tax (Barkoczy, 2015)
In the given case the land subdivision is essential aspect that has to be considered. The land sub-division does not cause change in the age, date of purchase or cost base of the of the newly formed land blocks. As per the size of the new land subdivision, the cost of the original land could be distributed. As per the law, if the land has a pre CGT status, subdivision does not change its status (Faccio and Xu, 2015). The result of subdivided land sale is important to comprehend to decide if it is a revenue or capital. For example, for the real estate agents the land subdivision is mainly done for commercial purpose and hence its treated as the revenue for him.
As per the case details, Graham used his land for agriculture and when the sales slowed he decided to sell his land. When the entire land was not getting good deals, he subdivided the land to facilitate the sale. These details are considered for categorising the sale made by Graham as revenue or capital. The tax implications on the sale made by Graham is further discussed.
Subdivision as a Capital or Revenue:
When the land is held by the owner for long period and sold in order to make profits, then it’s called the sale of capital asset, as in the given case. For the classification as revenue or capital income for the subdivision following points to be considered:
If the purpose of subdivision is to ease the property realisation it comes under the capital income.
If the subdivision is a normal course of business it is under capital type.
The revenue is generated when the subdivision is repeated and followed by sales.
Also when the sub division is done by the agent or seller, who is an active party of transaction which is routine business it comes under revenue type (Woellner et al., 2016).