Taxation Determination TD 2018/15, issued on 31 October 2018, considers the capital gains tax (CGT) consequences of granting an easement, profit à prendre or licence over an asset.
In the ATO’s view, CGT event D1 (creating contractual or other rights) rather than CGT event A1 (disposing of an asset) happens when any of the following rights are granted over an asset:
- an easement, other than one arising by operation of the law;
- a right to enter and remove a product or part of the soil from a taxpayer’s land (a profit à prendre); or
- a licence (which does not confer the exclusive right to possess the land).