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Statutory licence
A statutory licence is a licence that gives the authority or permission for continuing the management of certain industries. This licence is granted by a government or any government authority under the Australian law or under the commonwealth, state, territorial law, or law of a foreign country. The licence is created by the applicant of statutory powers, and the rights attaching to the grant are subject to renewal or extension. Example of such licences are:

  • Radio and television broadcasting licences;
  • Export or import quotas;
  • Fishing permits;
  • Liquor licences;
  • Water licences; 
  • Game licences; 
  • Taxi licences.

A statutory licence is an asset if it permits one to execute his/her business and has Capital
Gains Tax (CGT) consequences if any trade occurs with it. If the holder of the licence, who will lodge tax return online, has complied with the terms and conditions of the grant, there is normally an expectation of renewal or extension.

Lease and mining or prospecting entitlement are excluded from statutory licence as special statutory rollover relief provisions are applicable here.

CGT rollover on statutory licence holder

Because of GST events, if the ownership of one or more original statutory licences ends and for the original licences you are issued new licences that authorises similar activities to those authorised by the original licence, a CGT rollover will be applied.
When you do your tax return online, you may be eligible to roll over all or part of your capital gain if you meet the conditions for a CTG rollover. The CTG rollover on your statutory licence has the consequences as below:

  • Any capital gain will be disregarded that arises from ending your original licence;
  • The amount that you paid and the value of any property you gave to acquire the original licence will be allocated to your new licence;
  • The date of the new licence will be treated as the date that you acquired your original licence.

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