CA12200 - General: Combined sales: What the apportionment legislation covers

CAA01/S562 (4) - (5) & CAA01/S572 (1)

The apportionments legislation CA12100 applies to the exchange of property and the surrender of a leasehold interest for valuable consideration as well as to sale proceeds.

Apply the apportionments legislation to the purchase price of property in the same way as you apply it to sale proceeds. You should also apply it to insurance, salvage and compensation monies.

Expenditure incurred on the acquisition of land, or the acquisition of a mineral asset is treated as the purchase price of property. This means that the apportionments legislation applies to it.

A company may agree to buy assets and then satisfy the purchase price by issuing shares instead of offering cash. If this happens you should accept that the company has incurred capital expenditure and that the purchase price is the value of the shares issued.

If assets are sold together with rental agreements and the sale price is not more than the cost of the assets you should accept that the whole of the sale price relates to the assets. If the sale price is more than the cost of the assets you should obtain as much information as possible, including a copy of the sale agreement, and submit the case to BAI (Technical).