Income Tax Assessment Act 1997

s 130-60 — Shares or units acquired by converting a convertible interest

(1) This table sets out the modification to the rules about * cost base and * reduced cost base that happens if you * acquire * shares, or units in a unit trust, by converting a * convertible interest. Conversion of a convertible interest Item In this situation: The modification is... 1 You * acquire * shares or units in a unit trust by converting a * convertible interest that is a * traditional security. The first element of the * cost base of the shares or units is the sum of: (a) the cost base of the convertible interest at the time of conversion; and (b) any amount paid to convert the convertible interest, except to the extent that the amount is represented in the paragraph (a) amount; and (c) all the amounts to be added under subsection (1A). The first element of their * reduced cost base is worked out similarly. 2 You * acquire * shares (except shares acquired under an * employee share scheme) by converting a * convertible interest that is not a * traditional security. The first element of the * cost base of the shares is the sum of: (a) the cost base of the convertible interest at the time of conversion; and (b) any amount paid to convert the convertible interest, except to the extent that the amount is represented in the paragraph (a) amount; and (c) all the amounts to be added under subsection (1A). The first element of their * reduced cost base is worked out similarly. 3 You * acquire units in a unit trust by converting a * convertible interest (except one that is a * traditional security) that was issued by the trustee of the unit trust after 28 January 1988. The first element of the * cost base of the units is the sum of: (a) the cost base of the convertible interest at the time of conversion; and (b) any amount paid to convert the convertible interest, except to the extent that the amount is represented in the paragraph (a) amount; and (c) all the amounts to be added under subsection (1A). The first element of their * reduced cost base is worked out similarly. (1A) An amount is to be added under this subsection if a * capital gain from the * convertible interest has been reduced under section 118 ‑ 20. This is so even though a capital gain that is made on conversion is disregarded under subsection (3). The amount to be added is the amount of the reduction. Note: For example, a capital gain made on the conversion under section 118 ‑ 20 may be reduced because an amount is included in the owner’s assessable income under subsection 26BB(2) of the Income Tax Assessment Act 1936 (about assessing a gain on disposal or redemption of a traditional security) or section 159GS of that Act (about balancing adjustments on transfer of a qualifying security). (1B) The payment to convert the convertible interest can include giving property (see section 103 ‑ 5). (2) You are taken to have * acquired the shares or units when the conversion of the convertible interest happened. (3) A * capital gain or * capital loss you make from converting the convertible interest is disregarded. Note 1: The conversion of the convertible interest would be an example of CGT event C2 (about a CGT asset ending). Note 2: There are transitional rules for some convertible notes: see section 130 ‑ 60 of the Income Tax (Transitional Provisions) Act 1997 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 163 of 2001, effective 1 July 2001 | Amended by No 133 of 2003, effective 17 Dec 2003

s 130-75 — Objects of Subdivision

The objects of this Subdivision are: (a) to recognise that: (i) Division 83A contains the primary rules for taxing gains on * ESS interests acquired under * employee share schemes; and (ii) * capital gains and * capital losses on such interests should usually be disregarded during the period in which Division 83A applies to them; and (b) to align the treatment of ESS interests under Division 83A and the CGT provisions by, for example: (i) turning off certain special CGT rules; and (ii) extending some of the deeming provisions of that Division into the CGT provisions; and (c) to disregard * employee share trusts for most CGT purposes, by treating ESS interests owned by such trusts as being directly owned by the beneficiaries of the trusts.

Amendment history: Inserted by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent

s 130-80 — ESS interests acquired under employee share schemes

Capital gains and losses (1) Disregard any * capital gain or * capital loss to the extent that it results from a * CGT event if: (a) the CGT event happens in relation to an * ESS interest you * acquire under an * employee share scheme; and (b) the CGT event is not CGT event E4, G1 or K8; and (c) if Subdivision 83A ‑ B applies to the interest—the time of the acquisition is the time when the CGT event happens; and (d) if Subdivision 83A ‑ C applies to the interest: (i) the time of the acquisition is the time when the CGT event happens; or (ii) the CGT event happens on or before the * ESS deferred taxing point for the ESS interest. (2) Subsection (1) does not apply if: (a) Subdivision 83A ‑ C applies to the * ESS interest; and (b) the * CGT event happens because you forfeit or lose the ESS interest (other than by disposing of it) on or before the * ESS deferred taxing point for the interest. General acquisition rule (3) Subsection 109 ‑ 5(2) (about when you acquire a CGT asset) does not apply to a * CGT asset and a * CGT event if: (a) the CGT asset is: (i) a * share; or (ii) a right to acquire a beneficial interest in a share; and (b) the CGT event is CGT event A1; and (c) you acquire an * ESS interest; and (d) the ESS interest is a beneficial interest in the share or right; and (e) Subdivision 83A ‑ B or 83A ‑ C (about employee share schemes) applies to the ESS interest. Market value substitution rule (4) Sections 112 ‑ 20 and 116 ‑ 30 (about the market value substitution rule) do not apply to the extent that they relate to: (a) you acquiring an * ESS interest to which Subdivision 83A ‑ C (about employee share schemes) applies; or (b) you: (i) forfeiting an ESS interest; or (ii) forfeiting or losing an ESS interest that is a beneficial interest in a right (without you having disposed of the interest or exercised the right); if Subdivision 83A ‑ B or 83A ‑ C applies to the ESS interest (ignoring section 83A ‑ 310); or (c) you acquiring an ESS interest that: (i) is a beneficial interest in a right; and (ii) is an ESS interest to which the provisions referred to in paragraphs 83A ‑ 33(1)(a) to (c) (about start ups) apply.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 101 of 2003, effective s. 4, Schedule 1 (items 2–20, 22), Schedule 2 (items 1–12), Schedule 3 (items 2–6) and Schedule 6 (items 16, 22–25, 27, 28, 30): Royal Assent s. 5: 11 Oct 2002 Sch 6 (items 17–19): 1 July 1997 (s 2(1) items 17, 18) Sch 6 (items 20, 21): 21 Dec 2000 (s 2(1) items 19, 20) Sch 6 (item 26): 10 Dec 1999 (s 2(1) item 22) Sch 6 (item 29): 30 June 2000 (s 2(1) item 25) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 32 of 2006, effective 6 Apr 2006 | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 168 of 2006, effective Schedule 3 (items 3–5): 13 Dec 2005 Remainder: Royal Assent | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5) | Repealed and substituted by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent | Amended by No 105 of 2015, effective Sch 1 (items 2–41, 44–51): 1 July 2015 (s 2)

s 130-85 — Interests in employee share trusts

Scope (1) This section applies if: (a) you * acquire an * ESS interest under an * employee share scheme; and (b) Subdivision 83A ‑ B or 83A ‑ C applies to the ESS interest; and (c) the ESS interest is, or arises because of, an interest you hold in an * employee share trust. Application of Division 83A, Part 3 ‑ 1 and this Part (2) Division 83A (Employee share schemes), Part 3 ‑ 1 (Capital gains and losses: general topics) and this Part apply as if you were absolutely entitled to the relevant * share or right: (a) from the time of acquisition of the * ESS interest; and (b) until you no longer have an ESS interest in the share or right. Note 1: An interest you hold in an employee share trust may give rise to an ESS interest because of the operation of section 83A ‑ 320. Note 2: As a result of subsection (2) of this section, CGT event E5 might happen at the time of acquisition. This may result in the trustee making a capital gain. However, any capital gain made by the beneficiary would be disregarded under section 130 ‑ 80. (3) However, if this section applies to you because an * associate of yours * acquired the * ESS interest, Division 83A, this Part and Part 3 ‑ 3 apply as if your associate were absolutely entitled to the relevant * share or right (instead of you): (a) either: (i) if Subdivision 83A ‑ B applies to the ESS interest—from the time of acquisition; or (ii) if Subdivision 83A ‑ C applies to the ESS interest—from immediately after the * ESS deferred taxing point for the ESS interest; and (b) until your associate no longer has an ESS interest in the share or right. Note: Once the ESS interest has been taxed to you under Subdivision 83A ‑ B or 83A ‑ C, section 83A ‑ 305 (which treats the interest as having been acquired by you, rather than your associate) is no longer relevant. Subsection (3) of this section ensures that your associate then gets the same tax treatment as you would have, had you originally acquired the interest. This does not, however, imply a disposal from you to your associate. Meaning of employee share trust (4) An employee share trust , for an * employee share scheme, is a trust whose sole activities are: (a) obtaining * shares or rights in a company; and (b) ensuring that * ESS interests in the company that are beneficial interests in those shares or rights are provided under the employee share scheme to employees, or to * associates of employees, of: (i) the company; or (ii) a * subsidiary of the company; and (c) other activities that are merely incidental to the activities mentioned in paragraphs (a) and (b).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 101 of 2003, effective s. 4, Schedule 1 (items 2–20, 22), Schedule 2 (items 1–12), Schedule 3 (items 2–6) and Schedule 6 (items 16, 22–25, 27, 28, 30): Royal Assent s. 5: 11 Oct 2002 Sch 6 (items 17–19): 1 July 1997 (s 2(1) items 17, 18) Sch 6 (items 20, 21): 21 Dec 2000 (s 2(1) items 19, 20) Sch 6 (item 26): 10 Dec 1999 (s 2(1) item 22) Sch 6 (item 29): 30 June 2000 (s 2(1) item 25) | Amended by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | Amended by No 32 of 2006, effective 6 Apr 2006 | Amended by No 168 of 2006, effective Schedule 3 (items 3–5): 13 Dec 2005 Remainder: Royal Assent | Repealed and substituted by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent

s 130-90 — Shares held by employee share trusts

Shares held for future acquisition under employee share schemes (1A) Disregard any * capital gain or * capital loss made by an * employee share trust to the extent that it results from a * CGT event, if: (a) immediately before the event happens, an * ESS interest is a * CGT asset of the trust; and (b) either of the following subparagraphs applies: (i) the event is CGT event E5, and the event happens because a beneficiary of the trust becomes absolutely entitled to the ESS interest as against the trustee; (ii) the event is CGT event E7, and the event happens because the trustee * disposes of the ESS interest to a beneficiary of the trust; and (c) Subdivision 83A ‑ B or 83A ‑ C (about employee share schemes) applies to the ESS interest. Shares held to satisfy the future exercise of rights acquired under employee share schemes (1) Disregard any * capital gain or * capital loss made by an * employee share trust, or a beneficiary of the trust, to the extent that it results from a * CGT event, if: (a) the CGT event is CGT event E5 or E7; and (b) the CGT event happens in relation to a * share; and (c) the beneficiary had acquired a beneficial interest in the share by exercising a right; and (d) the beneficiary’s beneficial interest in the right was an * ESS interest to which Subdivision 83A ‑ B or 83A ‑ C (about employee share schemes) applied. (2) Subsection (1A) or (1) does not apply if the beneficiary acquired the beneficial interest in the * share for more than its * cost base in the hands of the * employee share trust at the time the * CGT event happens.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 179 of 1999, effective Sch 7, Sch 8, Sch 16 (items 18, 19, 37) and Sch 18: 22 Dec 1999 (s 2(1), (7)(d), (e)) Sch 11 (items 80–105) and Sch 18 (items 4, 5, 17, 21, 32): 1 July 2000 (s 2(9)(b), (14)) | Amended by No 168 of 2001, effective Schedule 2: 1 July 2000 Remainder: Royal Assent | Amended by No 101 of 2003, effective s. 4, Schedule 1 (items 2–20, 22), Schedule 2 (items 1–12), Schedule 3 (items 2–6) and Schedule 6 (items 16, 22–25, 27, 28, 30): Royal Assent s. 5: 11 Oct 2002 Sch 6 (items 17–19): 1 July 1997 (s 2(1) items 17, 18) Sch 6 (items 20, 21): 21 Dec 2000 (s 2(1) items 19, 20) Sch 6 (item 26): 10 Dec 1999 (s 2(1) item 22) Sch 6 (item 29): 30 June 2000 (s 2(1) item 25) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | Amended by No 56 of 2007, effective 12 Apr 2007 | Amended by No 59 of 2008, effective 30 June 2008 | Amended by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010 | Repealed and substituted by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 130-95 — Shares and rights in relation to ESS interests

For the purposes of Part 3 ‑ 1 (Capital gains and losses: general topics) and this Part, treat a * CGT event that happens in relation to a * share or right in the same way as a CGT event that happens in relation to an * ESS interest, if: (a) Subdivision 83A ‑ B or 83A ‑ C (about employee share schemes) applies to the ESS interest; and (b) the ESS interest forms part of the share or right.

Amendment history: Inserted by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Repealed and substituted by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent

s 130-97 — Application of certain provisions of Division 83A

The following provisions have effect for the purposes of this Subdivision in the same way as they have for the purposes of Division 83A: (a) section 83A ‑ 130 (about takeovers and restructures); (b) section 83A ‑ 305 (about associates); (c) section 83A ‑ 320 (about trusts); (d) section 83A ‑ 325 (about relationships similar to employment); (e) section 83A ‑ 335 (about stapled securities); (f) section 83A ‑ 340 (about indeterminate rights).

Amendment history: Inserted by No 56 of 2007, effective 12 Apr 2007 | Repealed by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent | Inserted by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent | Inserted by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 130-100 — Exchangeable interest

An exchangeable interest is a * traditional security or * qualifying security that: (a) was issued on the basis that it will or may be: (i) disposed of to the issuer of the traditional security or the qualifying security or to a * connected entity of the issuer of the traditional security or the qualifying security; or (ii) redeemed; in exchange for * shares in a company that is neither: (iii) the issuer of the traditional security or the qualifying security; nor (iv) a connected entity of the issuer of the traditional security or the qualifying security; and (b) was issued on or after 1 July 2001.

Amendment history: Inserted by No 133 of 2003, effective 17 Dec 2003 | Amended by No 15 of 2009, effective Sch 1 (items 1–30, 52–97, 102–105): 26 Mar 2009 (s 2(1) item 2) Sch 1 (items 106–112, 114): 17 Dec 2003 (s 2(1) item 3)

s 130-105 — Shares acquired in exchange for the disposal or redemption of an exchangeable interest

Cost base and reduced cost base (1) The table has effect: Exchange of an exchangeable interest Item In this situation: The rules about cost base and reduced cost base are modified in this way... 1 You * acquire shares in a company in exchange for the disposal of an * exchangeable interest, and the disposal of the exchangeable interest was to: (a) the issuer of the exchangeable interest; or (b) a * connected entity of the issuer of the exchangeable interest. The first element of the * cost base of the shares is the sum of: (a) the cost base of the exchangeable interest at the time of the disposal; and (b) any amount paid for the exchange, except to the extent that the amount is represented in the paragraph (a) amount; and (c) all the amounts to be added under subsection (2). The first element of their * reduced cost base is worked out similarly. 2 You * acquire shares in a company in exchange for the redemption of an * exchangeable interest. The first element of the * cost base of the shares is the sum of: (a) the cost base of the exchangeable interest at the time of the redemption; and (b) any amount paid for the exchange, except to the extent that the amount is represented in the paragraph (a) amount; and (c) all the amounts to be added under subsection (2). The first element of their * reduced cost base is worked out similarly. (2) An amount is to be added under this subsection if a * capital gain on the disposal or redemption of the exchangeable interest has been reduced under section 118 ‑ 20. This is so even though a capital gain that is made on the disposal or redemption of the exchangeable interest is disregarded under subsection (4). The amount to be added is the amount of the reduction. (3) The payment for the exchange can include giving property (see section 103 ‑ 5). Other CGT consequences (4) The table has effect: Exchange of an exchangeable interest Item In this situation: This is the result: 1 You * acquire shares in a company in exchange for the disposal of an * exchangeable interest, and the disposal of the exchangeable interest was to: (a) the issuer of the exchangeable interest; or (b) a * connected entity of the issuer of the exchangeable interest. (a) you are taken to have acquired the shares when the disposal of the exchangeable interest happened; and (b) a * capital gain or * capital loss you make from the disposal of the exchangeable interest is disregarded. 2 You * acquire shares in a company in exchange for the redemption of an * exchangeable interest. (a) you are taken to have acquired the shares when the redemption of the exchangeable interest happened; and (b) a * capital gain or * capital loss you make from the redemption of the exchangeable interest is disregarded. Application (5) This section applies to the disposal or redemption of an * exchangeable interest on or after 1 July 2001.

Amendment history: Inserted by No 133 of 2003, effective 17 Dec 2003

s 130-110 — Reducing the reduced cost base before disposal

(1) This section applies if: (a) an entity (the minerals explorer ) issues a * share in the minerals explorer to another entity (the investor ) during the 2017 ‑ 18, 2018 ‑ 19, 2019 ‑ 20, 2020 ‑ 21, 2021 ‑ 22, 2022 ‑ 23, 2023 ‑ 24 or 2024 ‑ 25 income year; and (b) the Commissioner makes a determination under section 418 ‑ 101 allocating exploration credits to the minerals explorer for the income year in which the share is issued; and (c) the share is issued to the investor on or after the day on which the Commissioner’s determination is made; and (d) the share is an * equity interest. (2) The * reduced cost base of the * share is to be reduced immediately before the disposal of the share by the amount worked out as follows: where: investment period means the period, within the income year in which the * share is issued to the investor, that: (a) begins on the day on which the Commissioner makes the determination mentioned in paragraph (1)(b); and (b) ends at the end of the income year.

Amendment history: Inserted by No 15 of 2018, effective Sch 1 (items 1–6A, 11–26, 65–67): 1 Apr 2018 (s 2(1) items 2, 4) Sch 1 (items 42–52, 68–73): repealed before commencing (s 2(1) items 3, 5) | Amended by No 72 of 2021, effective Sch 2 (items 1–12, 17, 18) and Sch 3 (items 1, 2): 1 July 2021 (s 2(1) items 3, 4)

s 132-1 — Lessee incurs expenditure to get lease term varied or waived

If the lessee of property incurs expenditure in obtaining the consent of the lessor to vary or waive a term of the lease, the fourth element of the lease’s * cost base and * reduced cost base includes the amount of that expenditure. The expenditure can include giving property: see section 103 ‑ 5.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 132-5 — Lessor pays lessee for improvements

The fourth element of the * cost base and * reduced cost base of property that was subject to a lease includes any payment (because of the lease expiring or being surrendered or forfeited) by the lessor to the lessee for expenditure of a capital nature incurred by the lessee in making improvements to the lease property. The payment or expenditure can include giving property: see section 103 ‑ 5.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 132-10 — Grant of a long ‑ term lease

(1) These rules apply if * CGT event F2 happens for a lessor of property. (2) For any later * CGT event that happens to the land or the lessor’s lease of it, its * cost base and * reduced cost base (including the cost base and reduced cost base of any building, part of a building, structure or improvement that is treated as a separate * CGT asset) excludes: (a) any expenditure incurred before * CGT event F2 happens; and (b) the * cost of any * depreciating asset for which the lessor has deducted or can deduct an amount for the asset’s decline in value under this Act. Note: Subdivision 108 ‑ D sets out when a building, structure or improvement is treated as a separate CGT asset. (3) The fourth element of the property’s * cost base and * reduced cost base includes any payment by the lessor to the lessee to vary or waive a term of the lease or for the forfeiture or surrender of the lease, reduced by the amount of any * input tax credit to which the lessor is entitled for the variation or waiver. (4) The expenditure or payment can include giving property: see section 103 ‑ 5.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1))

s 132-15 — Lessee of land acquires reversionary interest of lessor

(1) This table sets out what happens if: (a) the lessee of land * acquires the reversionary interest of the lessor in the land; and (b) Subdivision 124 ‑ J (roll ‑ over provisions for Crown leases) does not apply to the acquisition. Lessee acquires reversionary interest of lessor Item In this situation: The lessee is taken to have * acquired the land at this time: The lessee is taken to have acquired the land for: 1 The lease was originally granted for 99 years or more When the lease was granted or assigned to the lessee Any premium the lessee paid for the grant or assignment of the lease, plus the amount the lessee paid to * acquire the reversionary interest 2 The lease was originally granted for less than 99 years When the lessee * acquired the reversionary interest (a) if the lessee * acquired the lease after 19 September 1985—any premium the lessee paid for the grant or assignment of the lease, plus the amount the lessee paid to acquire the reversionary interest; or (b) if the lessee acquired the lease before 20 September 1985—the * market value of the land when the lessee acquired it (2) All the payments can include giving property: see section 103 ‑ 5. Note: CGT events F1 to F5 deal specifically with leases. See also (in particular) CGT event C2 (about cancellation, surrender and similar endings).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9))

s 134-1 — Exercise of options

(1) This table sets out the effects of the exercise of an option (including an option that has been renewed or extended) on the * cost bases and * reduced cost bases of the grantor and the entity that exercises the option (the grantee ). Exercise of options Item In this situation: Effect on cost base and reduced cost base: 1 Option binds grantor to: (a) * dispose of a * CGT asset; or (b) create (including grant or issue) a CGT asset (call option) For the grantee The first element of the grantee’s * cost base and * reduced cost base for the CGT asset is what the grantee paid for the option (or to renew or extend it) plus any amount the grantee paid to exercise it For the grantor See section 116 ‑ 65 2 Option binds grantor to * acquire a * CGT asset (put option) For the grantor The first element of the grantor’s * cost base and * reduced cost base for the asset acquired is any amount paid to exercise the option reduced by any payment received by the grantor for the option (or to renew or extend it) For the grantee The second element of the grantee’s cost base and reduced cost base for the asset acquired by the grantor includes any payment the grantee made to acquire the option (or to renew or extend it) Note 1: If you granted, renewed or extended an option, CGT event C3 or D2 may happen. Note 2: Item 1 in the table is modified for certain options granted before 20 September 1985: see section 134 ‑ 1 of the Income Tax (Transitional Provisions) Act 1997 . Note 3: Item 1 in the table is modified for ESS interests acquired under employee share schemes: see Division 83A and section 112 ‑ 97. Note 4: This Division has no operation in relation to an option acquired under an employee share scheme if the option is exercised before the ESS deferred taxing point for the option: see Subdivision 130 ‑ D. Division 83A applies instead. (2) All the payments can include giving property: see section 103 ‑ 5. Example 1: Steven obtains an option to buy a yacht (for $75,000) from Tom. Steven pays $5,000 for the option. Steven exercises the option. The first element of his cost base and reduced cost base for the yacht includes the expenditure he incurred for the option. So, the first element of his cost base and reduced cost base for the yacht is: Example 2: An entity owns 1,000 shares in a company. Bill grants the entity an option which, if exercised, would require him to buy the shares for $2 each. The entity pays Bill 10 cents per share for the option. The entity exercises the option. Bill paid $2,000 for the shares. He received $100 from the entity for granting the option. The first element of Bill’s cost base and reduced cost base for the shares is: In working out whether the entity made a capital gain or loss on the sale of the shares, the second element of its cost base (and reduced cost base) includes the $100 the entity paid for the option. (4) A * capital gain or * capital loss the grantee makes from exercising the option is disregarded. However, this rule does not apply if the grantee * acquired the option under a trust restructure (see Subdivision 124 ‑ N) and, on exercising the option, held the resulting asset as an item of * trading stock. Note 1: The exercise of the option would be an example of CGT event C2 (about a CGT asset ending). Note 2: There is an exemption for the grantor if the option is exercised: see subsection 104 ‑ 40(5). (5) This Division does not apply to rights or options to which Subdivision 130 ‑ B applies. Note: Subdivision 130 ‑ B deals (amongst other things) with rights and options issued by a company or trust where you did not pay or give anything to acquire them. (6) This Division does not apply to: (a) an option to the extent that the option binds the grantor to * dispose of * foreign currency; or (b) an option to the extent that the option binds the grantor to * acquire * foreign currency.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 53 of 2002, effective Schedules 3 and 4: 1 July 2002 Remainder: Royal Assent | Amended by No 133 of 2003, effective 17 Dec 2003 | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 133 of 2009, effective Schedule 1 (items 1, 21–76, 86, 87): 14 Dec 2009 Schedule 2 (items 1–13, 15) and Schedule 3 (items 28–40, 44, 45): Royal Assent

s 137-1 — What this Subdivision is about

A CGT event does not happen when certain granny flat arrangements are entered into, varied or terminated. Table of sections Operative provisions 137 ‑ 10 Meaning of key terms 137 ‑ 15 CGT event does not happen when a certain kind of granny flat arrangement is entered into 137 ‑ 20 CGT event does not happen when a certain kind of granny flat arrangement is varied 137 ‑ 25 CGT event does not happen when a certain kind of granny flat arrangement is terminated

Amendment history: Inserted by No 72 of 2021, effective Sch 2 (items 1–12, 17, 18) and Sch 3 (items 1, 2): 1 July 2021 (s 2(1) items 3, 4)

s 137-10 — Meaning of key terms

(1) An individual holds a granny flat interest in a * dwelling under an * arrangement if the individual has a right to occupy the dwelling for life that has been conferred by the arrangement. (2) An individual is eligible for a granny flat interest at a particular time if: (a) the individual reached * pension age at or before that time; or (b) the individual: (i) needs, because of a disability, assistance to carry out most day ‑ to ‑ day activities; and (ii) is likely to continue to need that assistance, because of that disability, for at least 12 months after that time. (3) This Subdivision applies: (a) to a * dwelling’s * adjacent land in a corresponding way to the way Subdivision 118 ‑ B applies to the adjacent land; or (b) to an * adjacent structure of a flat or home unit in a corresponding way to the way Subdivision 118 ‑ B applies to the adjacent structure. Note: Subsections 118 ‑ 120(1) and (5) provide that Subdivision 118 ‑ B (about main residences) applies to adjacent land and adjacent structures as if they were a dwelling.

Amendment history: Inserted by No 72 of 2021, effective Sch 2 (items 1–12, 17, 18) and Sch 3 (items 1, 2): 1 July 2021 (s 2(1) items 3, 4)

s 137-15 — CGT event does not happen when a certain kind of granny flat arrangement is entered into

A * CGT event does not happen, to the extent it relates to creating a * granny flat interest in a * dwelling under an * arrangement by entering into the arrangement at a particular time (the start time ), if: (a) the individual who holds, or who is to hold, the granny flat interest under the arrangement is * eligible for a granny flat interest at the start time; and (b) another individual: (i) holds an * ownership interest in the dwelling at the start time; or (ii) agrees, under the arrangement, to * acquire an ownership interest in a dwelling that is to be the dwelling in which the first ‑ mentioned individual is to hold the granny flat interest; and (c) at the start time, both individuals are parties to the arrangement; and (d) the arrangement: (i) is in writing; and (ii) indicates an intention for the parties to the arrangement to be legally bound by it; and (e) the arrangement is not of a commercial nature.

Amendment history: Inserted by No 72 of 2021, effective Sch 2 (items 1–12, 17, 18) and Sch 3 (items 1, 2): 1 July 2021 (s 2(1) items 3, 4)

s 137-20 — CGT event does not happen when a certain kind of granny flat arrangement is varied

A * CGT event does not happen, to the extent it relates to creating or varying a * granny flat interest in a * dwelling under an * arrangement by varying the arrangement at a particular time (the variation time ), if: (a) the individual who holds, or who is to hold, the granny flat interest under the arrangement (as varied) is * eligible for a granny flat interest at the variation time; and (b) another individual: (i) holds an * ownership interest in the dwelling at the variation time; or (ii) agrees, under the arrangement (as varied), to * acquire an ownership interest in a dwelling that is to be the dwelling in which the first ‑ mentioned individual is to hold the granny flat interest; and (c) at the variation time, both individuals are parties to the arrangement (as varied); and (d) the arrangement (as varied): (i) is in writing; and (ii) indicates an intention for the parties to the arrangement to be legally bound by it; and (e) the arrangement (as varied) is not of a commercial nature.

Amendment history: Inserted by No 72 of 2021, effective Sch 2 (items 1–12, 17, 18) and Sch 3 (items 1, 2): 1 July 2021 (s 2(1) items 3, 4)

s 137-25 — CGT event does not happen when a certain kind of granny flat arrangement is terminated

A * CGT event does not happen, to the extent that it relates to terminating a * granny flat interest in a * dwelling under an * arrangement by terminating the arrangement, if: (a) section 137 ‑ 15 applied so that a CGT event did not happen when the arrangement was entered into; or (b) section 137 ‑ 20 applied so that a CGT event did not happen when the arrangement was varied.

Amendment history: Inserted by No 72 of 2021, effective Sch 2 (items 1–12, 17, 18) and Sch 3 (items 1, 2): 1 July 2021 (s 2(1) items 3, 4)

s 149-10 — What is a pre ‑ CGT asset?

A * CGT asset that an entity owns is a pre ‑ CGT asset if, and only if: (a) the entity last acquired the asset before 20 September 1985; and (b) the entity was not, immediately before the start of the 1998 ‑ 99 income year, taken under: (i) former subsection 160ZZS(1) of the Income Tax Assessment Act 1936 ; or (ii) Subdivision C of Division 20 of former Part IIIA of that Act; to have acquired the asset on or after 20 September 1985; and (c) the asset has not stopped being a pre ‑ CGT asset of the entity because of this Division. Note 1: There are transitional rules for assets that stopped being pre ‑ CGT assets under the Income Tax Assessment Act 1936 : see section 149 ‑ 5 of the Income Tax (Transitional Provisions) Act 1997 . Note 2: A CGT asset will cease to be a pre ‑ CGT asset on 1 July 2027 (see section 112 ‑ 175).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 149-15 — Majority underlying interests in a CGT asset

(1) Majority underlying interests in a * CGT asset consist of: (a) more than 50% of the beneficial interests that * ultimate owners have (whether directly or * indirectly) in the asset; and (b) more than 50% of the beneficial interests that ultimate owners have (whether directly or indirectly) in any * ordinary income that may be * derived from the asset. (2) An underlying interest in a * CGT asset is a beneficial interest that an * ultimate owner has (whether directly or * indirectly) in the asset or in any * ordinary income that may be * derived from the asset. (3) An ultimate owner is: (a) an individual; or (b) a company whose * constitution prevents it from making any distribution, whether in money, property or otherwise, to its members; or (c) the Commonwealth, a State or a Territory; or (d) a municipal corporation; or (e) a * local governing body; or (f) the government of a foreign country, or of part of a foreign country. (4) An * ultimate owner indirectly has a beneficial interest in a * CGT asset of another entity (that is not an ultimate owner) if he, she or it would receive for his, her or its own benefit any of the capital of the other entity if: (a) the other entity were to distribute any of its capital; and (b) the capital were then successively distributed by each entity interposed between the other entity and the ultimate owner. (5) An * ultimate owner indirectly has a beneficial interest in * ordinary income that may be * derived from a * CGT asset of another entity (that is not an ultimate owner) if he, she or it would receive for his, her or its own benefit any of a * dividend or income if: (a) the other entity were to pay that dividend, or otherwise distribute that income; and (b) the dividend or income were then successively paid or distributed by each entity interposed between the other entity and the ultimate owner.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5) | Amended by No 14 of 2009, effective Schedule 1, Schedule 4 (items 11–34, 52) and Schedule 5 (items 7–13): Royal Assent Schedule 5 (items 2, 3, 14): 29 Jan 2009 Schedule 5 (items 5, 6): 1 July 2011 | Amended by No 15 of 2017, effective Sch 1 (item 1): 1 Mar 2017 (s 2(1) item 2) Sch 2 and Sch 4 (items 26–69, 71–83): 1 Apr 2017 (s 2(1) items 3, 8, 10) Sch 4 (item 70): 19 Mar 2015 (s 2(1) item 9)

s 149-25 — Which entities are affected

This Subdivision provides for when a * CGT asset of an entity stops being a * pre ‑ CGT asset (unless the entity is covered by section 149 ‑ 50). Note: Subdivision 149 ‑ C deals with when an asset of such an entity stops being a pre ‑ CGT asset.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 149-30 — Effects if asset no longer has same majority underlying ownership

(1) The asset stops being a * pre ‑ CGT asset at the earliest time when * majority underlying interests in the asset were not had by * ultimate owners who had * majority underlying interests in the asset immediately before 20 September 1985. (1A) Also, Part 3 ‑ 1 and this Part (except this Division) apply to the asset as if the entity had acquired it at that earliest time. (2) If the Commissioner is satisfied, or thinks it reasonable to assume, that at all times on and after 20 September 1985 and before a particular time * majority underlying interests in the asset were had by * ultimate owners who had * majority underlying interests in the asset immediately before that day, subsections (1) and (1A) apply as if that were in fact the case. New owner standing in shoes of former owner (3) Subsection (4) affects how the * majority underlying interests in the asset are worked out if an * ultimate owner (the new owner ) has acquired a percentage (the acquired percentage ) of the * underlying interests in the asset because of an event described in column 2 of an item in the table. The former owner is the entity described in column 3 of that item. Events leading to new owner standing in for former owner Item For this kind of event: The former owner is: 1 * CGT event A1 or B1 if there is a roll ‑ over under Subdivision 126 ‑ A (about marriage or relationship breakdowns) for the event the entity that, immediately before the event happened, owned the * CGT asset to which the event relates 2 the death of a person that person (4) This section applies as if the new owner had (in addition to any other * underlying interests), at any time when the former owner had a percentage (the former owner’s percentage ) of the underlying interests in the asset, a percentage of the underlying interests in the asset equal to the acquired percentage, or the former owner’s percentage at that time, whichever is the less.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008 | Amended by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010

s 149-35 — Cost base elements of asset that stops being a pre ‑ CGT asset

(1) This section affects the * cost base and * reduced cost base of the asset if it stops being a * pre ‑ CGT asset. (2) The first element of each is the asset’s * market value at the time referred to in subsection 149 ‑ 30(1).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9))

s 149-50 — Which entities are affected

(1) This Subdivision provides for when a * CGT asset of an entity of any of these kinds stops being a * pre ‑ CGT asset: (a) a company * shares in which (except shares that carry the right to a fixed rate of * dividend) are listed for quotation in the official list of an * approved stock exchange; (b) a * publicly traded unit trust; (c) a * mutual insurance company; (d) a * mutual affiliate company; (e) a company (other than one covered by paragraph (a)) all the * shares in which are beneficially owned, whether directly, or indirectly through one or more interposed entities, by one or more of the following: (i) a company covered by paragraph (a); (ii) a * mutual insurance company; (iii) a * mutual affiliate company; (iv) a * publicly traded unit trust; (2) A publicly traded unit trust is a unit trust the units in which: (a) are listed for quotation in the official list of an * approved stock exchange; or (b) are ordinarily available for subscription or purchase by the public. (3) This Division applies as if what is done or not done by the trustee of a * publicly traded unit trust had been done or not done by the trust.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3))

s 149-55 — Entity to give the Commissioner evidence periodically as to whether asset still has same majority underlying ownership

(1) Within 6 months after each * test day, the entity must give the Commissioner written evidence about the * majority underlying interests in the asset at the end of that day. (The Commissioner can extend the period for doing so.) (1A) The evidence must be given in a form that makes the information about those interests readily apparent. (1B) The only consequences of failing to give the evidence are those set out in section 149 ‑ 70. It is not an offence to fail to give the evidence. Test days (2) Each of these days is a test day : (aa) 30 June 1999; (a) a day that is 5 years (or a multiple of 5 years) after 30 June 1999 (but see subsection (3)); (b) if the entity is covered by paragraph 149 ‑ 50(1)(a) or (e)—a day on which there is * abnormal trading in * shares in the company; (c) if the entity is a * publicly traded unit trust—a day on which there is * abnormal trading in units in the trust; (d) if the entity is a company all the * shares in which are beneficially owned, whether directly, or indirectly through one or more interposed entities, by one or more of the following: (i) a company * shares in which (except shares that carry the right to a fixed rate of * dividend) are listed for quotation in the official list of an * approved stock exchange; (ii) a * publicly traded unit trust; a day on which there is * abnormal trading in * shares in the other company or in units in that unit trust. Note: Subsections (6) and (7) change the normal rules about abnormal trading. (3) If a day (the fifth anniversary ) that would otherwise be a * test day because of paragraph (2)(a) is: (a) a Saturday; or (b) a Sunday; or (c) a day that is a public holiday or a bank holiday in the place where the records of ownership of shares or other interests in the entity are kept; the next day that is not covered by a paragraph of this subsection is a test day instead of the fifth anniversary. Determining the end of a day (4) For the purposes of this section, the end of a day is determined according to legal time in the place where the records of ownership of shares or other interests in the entity are kept. Special rules about abnormal trading (5) Subsections (6) and (7) change how Subdivision 960 ‑ H applies for the purposes of determining under this section whether there is * abnormal trading in * shares in a company or in units in a unit trust. (6) An issue, redemption or transfer, or any other dealing, is a trading if, and only if, it changes the respective proportions in which * ultimate owners have * underlying interests in * CGT assets of the company or trust. (7) Section 960 ‑ 235 (about suspected transactions involving 5% or more of * shares in the company or units in the trust) is disregarded.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3))

s 149-60 — What the evidence must show

(1A) To avoid the consequences in section 149 ‑ 70, the following condition must be complied with. (1) On the basis solely of the evidence given to the Commissioner under subsection 149 ‑ 55(1), the Commissioner must be satisfied that, or think it reasonable to assume that, at the end of the * test day, * majority underlying interests in the asset were had by * ultimate owners who also had * majority underlying interests in the asset at the end of the starting day. The starting day is: (a) a day the entity chooses under subsection (2); or (b) if no day is so chosen—19 September 1985. (2) The day chosen: (a) must be no earlier than 1 July 1985 and no later than 30 June 1986; and (b) must be one the choice of which will allow evidence to be given that enables a reasonable approximation of the * ultimate owners who had * underlying interests in the assets of the entity at the end of 19 September 1985. How unidentified owners are treated (3) So far as the evidence does not show who had * underlying interests in the asset at the end of the * starting day, the evidence must be treated on the assumption that those interests were then had by * ultimate owners who did not have * underlying interests in the asset at the end of the * test day. New owner standing in the shoes of former owner (4) Subsection (5) affects how the evidence must be treated if an * ultimate owner (the new owner ) has acquired a percentage (the acquired percentage ) of the * underlying interests in the asset because of an event described in column 2 of an item in the table. The former owner is the entity described in column 3 of that item. Events leading to new owner standing in for former owner Item For this kind of event: The former owner is: 1 * CGT event A1 or B1 if there is a roll ‑ over under Subdivision 126 ‑ A (about marriage or relationship breakdowns) for the event the entity that, immediately before the event happened, owned the * CGT asset to which the event relates 2 the death of a person that person (5) The evidence must be treated on the assumption that the new owner had (in addition to any other * underlying interests), at any time when the former owner had a percentage (the former owner’s percentage ) of the * underlying interests in the asset, a percentage of the underlying interests in the asset equal to the acquired percentage, or the former owner’s percentage at that time, whichever is the less. Determining the end of a day (6) For the purposes of this section, the end of a day is determined according to legal time in the place where the records of ownership of shares or other interests in the entity are kept.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008

s 149-70 — Effects if asset no longer has same majority underlying ownership

(1) The asset stops being a * pre ‑ CGT asset if the condition in subsection 149 ‑ 60(1) is not satisfied. (2) Also, Part 3 ‑ 1 and this Part (except this Division) apply to the asset as if the entity had acquired it at the end of the * test day (as determined under subsection 149 ‑ 55(4)).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3))

s 149-75 — Cost base elements of asset that stops being a pre ‑ CGT asset

(1) This section affects the * cost base and * reduced cost base of the asset if it stops being a * pre ‑ CGT asset. (2) The first element of each is the asset’s * market value at the time referred to in subsection 149 ‑ 70(2).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9))

s 149-80 — No more evidence needed after asset stops being a pre ‑ CGT asset

After the asset stops being a * pre ‑ CGT asset, the entity need not give the Commissioner any more evidence about it under section 149 ‑ 55.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3))

s 149-162 — Subdivision applies only if entity gives sufficient evidence

(1) This Subdivision applies only if, on the basis solely of evidence the entity gives the Commissioner, the Commissioner is satisfied, or thinks it reasonable to assume, that this Subdivision applies to the entity. (2) The evidence must be given in a form that makes it readily apparent whether this Subdivision applies.

Amendment history: Inserted by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3))

s 149-165 — Members treated as having underlying interests in assets until demutualisation

(1) This section modifies the treatment of evidence that an entity gives the Commissioner under section 149 ‑ 55 as to the * ultimate owners who had * underlying interests in the asset at a particular time if the entity: (a) was: (i) a * mutual insurance company; or (ii) a * mutual affiliate company; at the end of the * starting day (as determined under subsection 149 ‑ 60(6)); and (b) has since stopped being a company of either of those kinds, but either: (i) has continued in existence as a company covered by paragraph 149 ‑ 50(1)(a) or (e) or a * publicly traded unit trust; or (ii) has undergone a demutualisation in relation to which Division 316 (Demutualisation of friendly society health or life insurers) applied and has continued in existence as a company; and (c) when it stopped being an entity of either of those kinds (the stopping time ), had more than 50 members. (2) The entity may require the Commissioner to treat the evidence on the assumption that an * ultimate owner who: (a) immediately before the stopping time was a member of the entity; and (b) immediately after the stopping time had an * underlying interest in the asset; had the interest at all times from and including the end of the * starting day until immediately after the stopping time.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010

s 149-170 — Effect of demutualisation of interposed company

(1) This section modifies the treatment of evidence that an entity (the head entity ) gives the Commissioner under section 149 ‑ 55 as to the * ultimate owners who had * underlying interests in the asset at a particular time if another entity (the interposed company ): (a) was: (i) a * mutual insurance company; or (ii) a * mutual affiliate company; at the end of the * starting day (as determined under subsection 149 ‑ 60(6)) for the head entity; and (b) has since stopped being a company of either of those kinds, but either: (i) has continued in existence as a company covered by paragraph 149 ‑ 50(1)(a) or (e) or a * publicly traded unit trust; or (ii) has undergone a demutualisation in relation to which Division 316 (Demutualisation of friendly society health or life insurers) applied and has continued in existence as a company; and (c) when it stopped being an entity of either of those kinds (the stopping time ), had more than 50 members. (2) The head entity may require the Commissioner to treat the evidence on the assumption that an * ultimate owner who: (a) immediately before the stopping time was a member of the interposed company; and (b) immediately after the stopping time had, through the interposed company, an * underlying interest in the asset; had the interest at all times from and including the end of the * starting day until immediately after the stopping time.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010

s 152-1 — What this Division is about

To help small business, if the basic conditions for relief are satisfied, capital gains can be reduced by the various concessions in this Division. Those basic conditions are in Subdivision 152 ‑ A. Some of the concessions have additional, specific conditions that must also be satisfied. The 4 available small business concessions are: (a) the 15 ‑ year exemption (in Subdivision 152 ‑ B); (b) the 50% reduction (in Subdivision 152 ‑ C); (c) the retirement concession (in Subdivision 152 ‑ D); (d) the roll ‑ over (in Subdivision 152 ‑ E). A capital gain that qualifies for the 15 ‑ year exemption is disregarded entirely and is not taken into account under the method statement in subsection 102 ‑ 5(1). By contrast, the other concessions are only activated by step 6 of that method statement. This means that you must apply all available capital losses against your capital gains and quarantined amounts to first reduce your capital gains (under steps 1 to 4) before you can use those 3 concessions to further reduce them. Table of Subdivisions 152 ‑ A Basic conditions for relief under this Division 152 ‑ B Small business 15 ‑ year exemption 152 ‑ C Small business 50% reduction 152 ‑ D Small business retirement exemption 152 ‑ E Small business roll ‑ over

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 152-5 — What this Subdivision is about

This Subdivision sets out some basic conditions for relief. If the basic conditions are satisfied, an entity may be able to reduce its capital gains using the small business concessions in this Division. The 2 major basic conditions are: (a) the entity must be a CGT small business entity or a partner in a partnership that is a CGT small business entity, or the net value of assets that the entity and related entities own must not exceed $6,000,000; and (b) the CGT asset must be an active asset. Additional basic conditions must be satisfied in the following circumstances: (a) the CGT asset is a share in a company or an interest in a trust; (b) the CGT event involves certain rights or interests in relation to the income or capital of a partnership. Some of the concessions have additional, specific conditions that also must be satisfied. For example, the 15 ‑ year exemption applies only if you have held the CGT asset for at least 15 years and you retire. There are limitations on the availability of the small business concessions for CGT events J2, J5 and J6. You do not need to satisfy the basic conditions for the retirement exemption in relation to CGT events J5 and J6. Table of sections Basic conditions for relief 152 ‑ 10 Basic conditions for relief 152 ‑ 12 Special conditions for CGT event D1 Maximum net asset value test 152 ‑ 15 Maximum net asset value test 152 ‑ 20 Meaning of net value of the CGT assets Active asset test 152 ‑ 35 Active asset test 152 ‑ 40 Meaning of active asset 152 ‑ 45 Continuing time periods for involuntary disposals Treatment of passively held CGT assets 152 ‑ 47 Spouses or children taken to be affiliates for certain passively held CGT assets 152 ‑ 48 Working out an entity’s aggregated turnover for passively held CGT assets 152 ‑ 49 Businesses that are winding up Significant individual test 152 ‑ 50 Significant individual test 152 ‑ 55 Meaning of significant individual CGT concession stakeholder 152 ‑ 60 Meaning of CGT concession stakeholder Small business participation percentage 152 ‑ 65 Small business participation percentage 152 ‑ 70 Direct small business participation percentage 152 ‑ 75 Indirect small business participation percentage Nomination of controllers of discretionary trust 152 ‑ 78 Trustee of discretionary trust may nominate beneficiaries to be controllers of trust CGT event happens to asset or interest within 2 years of an individual’s death 152 ‑ 80 CGT event happens to an asset or interest within 2 years of individual’s death

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 80 of 2007, effective 21 June 2007 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 41 of 2017, effective Sch 2 (item 1), Sch 3 (items 1–21), Sch 4 (items 1–29) and Sch 5 (items 1, 2): 1 July 2016 (s 2(1) items 9, 14, 16, 18) Sch 2 (item 2) and Sch 5 (items 17, 18): repealed before commencing (s 2(1) items 10, 20) Sch 2 (item 3) and Sch 5 (items 19, 20): 1 July 2020 (s 2(1) items 11, 21) Sch 2 (item 4) and Sch 5 (items 21, 22): 1 July 2021 (s 2(1) items 12, 22) Sch 2 (item 5), Sch 3 (item 22) and Sch 4 (item 58): 19 May 2017 (s 2(1) items 13, 15, 17) Sch 5 (items 3–8): 1 July 2017 (s 2(1) item 19) | Amended by No 124 of 2018, effective Sch 2, Sch 3 (items 1–3A, 6) and Sch 4: 1 Jan 2019 (s 2(1) item 1) | Amended by No 95 of 2019, effective Sch 2 and 3: 1 Jan 2020 (s 2(1) item 2) Sch 5 (items 1, 4): 29 Oct 2019 (s 2(1) item 3)

s 152-10 — Basic conditions for relief

(1) A * capital gain (except a capital gain from * CGT event K7) you make may be reduced or disregarded under this Division if the following basic conditions are satisfied for the gain: (a) a * CGT event happens in relation to a * CGT asset of yours in an income year; Note: This condition does not apply in the case of CGT event D1: see section 152 ‑ 12. (b) the event would (apart from this Division) have resulted in the gain; (c) at least one of the following applies: (i) you are a * CGT small business entity for the income year; (ii) you satisfy the maximum net asset value test (see section 152 ‑ 15); (iii) you are a partner in a partnership that is a CGT small business entity for the income year and the CGT asset is an interest in an asset of the partnership; (iv) the conditions mentioned in subsection (1A) or (1B) are satisfied in relation to the CGT asset in the income year; (d) the CGT asset satisfies the active asset test (see section 152 ‑ 35). Note: This condition does not apply in the case of CGT event D1: see section 152 ‑ 12. CGT small business entity (1AA) You are a CGT small business entity for an income year if: (a) you are a * small business entity for the income year; and (b) you would be a small business entity for the income year if each reference in section 328 ‑ 110 to $10 million were a reference to $2 million. Note 1: For the purposes of subsection (1A) or (1B), in determining whether an entity would be a small business entity, see also sections 152 ‑ 48 and 152 ‑ 78. Note 2: Disregard the $2 million threshold in paragraph (b) for working out the availability of the small business 50% reduction mentioned in Subdivision 152 ‑ C (see subsection 152 ‑ 205(2)). Passively held assets—affiliates and entities connected with you (1A) The conditions in this subsection are satisfied in relation to the * CGT asset in the income year if: (a) your * affiliate, or an entity that is * connected with you, is a * CGT small business entity for the income year; and (b) you do not carry on a * business in the income year (other than in partnership); and (c) if you carry on a business in partnership—the CGT asset is not an interest in an asset of the partnership; and (d) in any case—the CGT small business entity referred to in paragraph (a) is the entity that, at a time in the income year, carries on the business (as referred to in subparagraph 152 ‑ 40(1)(a)(ii) or (iii) or paragraph 152 ‑ 40(1)(b)) in relation to the CGT asset. Note 1: The meaning of connected with is affected by section 152 ‑ 78. Note 3: For businesses that are winding up, see section 152 ‑ 49 and subsection 328 ‑ 110(5). Passively held assets—partnerships (1B) The conditions in this subsection are satisfied in relation to the * CGT asset in the income year if: (a) you are a partner in a partnership in the income year; and (b) the partnership is a * CGT small business entity for the income year; and (c) you do not carry on a * business in the income year (other than in partnership); and (d) the CGT asset is not an interest in an asset of the partnership; and (e) the business you carry on as a partner in the partnership referred to in paragraph (a) is the business that you, at a time in the income year, carry on (as referred to in subparagraph 152 ‑ 40(1)(a)(i) or paragraph 152 ‑ 40(1)(b)) in relation to the CGT asset. Note: For businesses that are winding up, see section 152 ‑ 49 and subsection 328 ‑ 110(5). Additional basic conditions for shares in a company or interests in a trust (2) The following additional basic conditions must be satisfied if the * CGT asset is a * share in a company, or an interest in a trust, (the object entity ): (a) the CGT asset would still satisfy the active asset test (see section 152 ‑ 35) if the assumptions in subsection (2A) were made; (b) if you do not satisfy the maximum net asset value test (see section 152 ‑ 15)—you are carrying on a * business just before the * CGT event; (c) either: (i) the object entity would be a * CGT small business entity for the income year; or (ii) the object entity would satisfy the maximum net asset value test (see section 152 ‑ 15); if the following assumptions were made: (iii) the only CGT assets or * annual turnovers considered were those of the object entity, each affiliate of the object entity, and each entity controlled by the object entity in a way described in section 328 ‑ 125; (iv) each reference in section 328 ‑ 125 to 40% were a reference to 20%; (v) no determination under subsection 328 ‑ 125(6) were in force; (d) just before the CGT event, either: (i) you are a * CGT concession stakeholder in the object entity; or (ii) CGT concession stakeholders in the object entity together have a * small business participation percentage in you of at least 90%. (2A) For the purposes of paragraph (2)(a), in working out whether subsection 152 ‑ 40(3) applies at a given time (the test time ) assume that: (a) an asset of a company or trust is covered by neither: (i) subparagraph 152 ‑ 40(3)(b)(ii) (about financial instruments); nor (ii) subparagraph 152 ‑ 40(3)(b)(iii) (about cash); if the company or trust acquired that asset for a purpose that included assisting an entity to otherwise satisfy paragraph (2)(a) of this section; and (b) paragraph 152 ‑ 40(3)(b) does not cover an asset that: (i) is a share in a company, or an interest in a trust, (the later entity ); and (ii) is held at the test time by the object entity directly or indirectly (through one or more interposed entities); and (c) subparagraph 152 ‑ 40(3)(b)(i) also covers each asset that: (i) is held at the test time by a later entity covered by subsection (2B); and (ii) is, for that later entity, an asset of a kind referred to in subparagraph 152 ‑ 40(3)(b)(i), (ii) or (iii), as modified by paragraphs (a) and (b) of this subsection; and (d) subject to paragraph (b) of this subsection, all of the assets of the object entity at the test time included all of the assets of each later entity at the test time; and (e) for the purposes of paragraph 152 ‑ 40(3)(b), the * market value at the test time of an asset held by a later entity were the product of: (i) the asset’s market value, apart from this paragraph, at the test time; and (ii) the object entity’s * small business participation percentage in the later entity at the test time. (2B) For the purposes of paragraph (2A)(c), this subsection covers a later entity if: (a) at the test time: (i) your * small business participation percentage in the later entity is at least 20%; or (ii) you are a * CGT concession stakeholder of the later entity; and (b) either: (i) the later entity would be a * CGT small business entity for the income year that includes the test time; or (ii) the later entity would satisfy the maximum net asset value test (see section 152 ‑ 15) for a notional CGT event taken to have happened at the test time; if the following assumptions were made: (iii) the only * CGT assets or * annual turnovers considered were those of the later entity and of the entities referred to in subparagraph (2)(c)(iii); (iv) each reference in section 328 ‑ 125 to 40% were a reference to 20%; (v) no determination under subsection 328 ‑ 125(6) were in force. Additional basic condition for CGT events involving certain rights or interests in relation to the income or capital of a partnership (2C) If the * CGT event involves the creation, transfer, variation or cessation of a right or interest that would entitle an entity to: (a) an amount of the income or capital of a partnership; or (b) an amount calculated by reference to a partner’s entitlement to an amount of income or capital of a partnership; it is an additional basic condition that the right or interest is a * membership interest of the entity in the partnership: (c) immediately after the CGT event happens; or (d) if the CGT event involved the cessation of the right or interest—immediately before the CGT event happens. Extra conditions for some concessions (3) In addition to the basic conditions in this section, some of the concessions in this Division have extra conditions that must be satisfied for the concession to be available. These extra conditions are set out in the relevant Subdivisions. Special rules for certain CGT events (4) Subdivisions 152 ‑ B and 152 ‑ C do not apply to * CGT events J2, J5 and J6. In addition, Subdivision 152 ‑ E does not apply to CGT events J5 and J6. Note 1: Those CGT events are about previous applications of the roll ‑ over in Subdivision 152 ‑ E. Note 2: This Subdivision does not apply to CGT events J5 and J6 in relation to the retirement exemption (see subsection 152 ‑ 305(4)).

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 80 of 2007, effective 21 June 2007 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011 | Amended by No 41 of 2017, effective Sch 2 (item 1), Sch 3 (items 1–21), Sch 4 (items 1–29) and Sch 5 (items 1, 2): 1 July 2016 (s 2(1) items 9, 14, 16, 18) Sch 2 (item 2) and Sch 5 (items 17, 18): repealed before commencing (s 2(1) items 10, 20) Sch 2 (item 3) and Sch 5 (items 19, 20): 1 July 2020 (s 2(1) items 11, 21) Sch 2 (item 4) and Sch 5 (items 21, 22): 1 July 2021 (s 2(1) items 12, 22) Sch 2 (item 5), Sch 3 (item 22) and Sch 4 (item 58): 19 May 2017 (s 2(1) items 13, 15, 17) Sch 5 (items 3–8): 1 July 2017 (s 2(1) item 19) | Amended by No 124 of 2018, effective Sch 2, Sch 3 (items 1–3A, 6) and Sch 4: 1 Jan 2019 (s 2(1) item 1) | Amended by No 95 of 2019, effective Sch 2 and 3: 1 Jan 2020 (s 2(1) item 2) Sch 5 (items 1, 4): 29 Oct 2019 (s 2(1) item 3) | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 152-12 — Special conditions for CGT event D1

(1) Paragraphs 152 ‑ 10(1)(a) and (d) do not apply in the case of * CGT event D1. (2) Instead, it is a basic condition that the right you create that triggers the * CGT event must be inherently connected with a * CGT asset of yours that satisfies the active asset test (see section 152 ‑ 35).

Amendment history: Inserted by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4))

s 152-15 — Maximum net asset value test

You satisfy the maximum net asset value test if, just before the * CGT event, the sum of the following amounts does not exceed $6,000,000: (a) the * net value of the CGT assets of yours; (b) the net value of the CGT assets of any entities * connected with you; (c) the net value of the CGT assets of any * affiliates of yours or entities connected with your affiliates (not counting any assets already counted under paragraph (b)). Note 1: Some assets are not included in the definition of net value of the CGT assets : see subsections 152 ‑ 20(2), (3) and (4). Note 2: The meaning of connected with is affected by section 152 ‑ 78.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007 | Amended by No 80 of 2007, effective 21 June 2007 | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 152-20 — Meaning of net value of the CGT assets

Meaning of net value of the CGT assets (1) The net value of the CGT assets of an entity is the amount (whether positive, negative or nil) obtained by subtracting from the sum of the * market values of those assets the sum of: (a) the liabilities of the entity that are related to the assets; and (b) the following provisions made by the entity: (i) provisions for annual leave; (ii) provisions for long service leave; (iii) provisions for unearned income; (iv) provisions for tax liabilities. Assets to be disregarded (2) In working out the net value of the CGT assets of an entity: (a) disregard * shares, units or other interests (except debt) in another entity that is * connected with the first ‑ mentioned entity or with an * affiliate of the first ‑ mentioned entity, but include any liabilities related to any such shares, units or interests; and (b) if the entity is an individual, disregard: (i) assets being used solely for the personal use and enjoyment of the individual, or the individual’s * affiliate (except a * dwelling, or an * ownership interest in a dwelling, that is the individual’s main residence, including any adjacent land to which the main residence exemption can extend because of section 118 ‑ 120); and (ii) except for an amount included under subsection (2A), the * market value of a dwelling, or an ownership interest in a dwelling, that is the individual’s main residence (including any relevant adjacent land); and (iii) a right to, or to any part of, any allowance, annuity or capital amount payable out of a * superannuation fund or an * approved deposit fund; and (iv) a right to, or to any part of, an asset of a superannuation fund or of an approved deposit fund; and (v) a policy of insurance on the life of an individual. Note: The meaning of connected with is affected by section 152 ‑ 78. Individual’s dwelling (2A) In working out the net value of the CGT assets of an individual, if: (a) a * dwelling of the individual, an * ownership interest in such a dwelling or any relevant adjacent land, was used, during all or part of the * ownership period of the dwelling, by the individual to produce assessable income to a particular extent; and (b) the individual satisfied paragraph 118 ‑ 190(1)(c) (about interest deductibility) at least to some extent; include such amount as is reasonable having regard to the extent to which that paragraph was satisfied. Note: The net value of the CGT assets of the individual will be reduced by the same proportion of the individual’s liabilities related to the dwelling, ownership interest or adjacent land. Net value of the CGT assets of others (3) In working out the net value of the CGT assets of: (a) your * affiliate; or (b) an entity that is * connected with your affiliate; include only those assets that are used, or held ready for use, in the carrying on of a * business by you or another entity * connected with you (whether the business is carried on alone or jointly with others). Note: The meaning of connected with is affected by section 152 ‑ 78. (4) However, disregard assets under subsection (3) that are used, or held ready for use, in the carrying on of a * business by an entity that is * connected with you only because of your * affiliate. Example: You and your husband sell a florist’s business that you jointly carry on. Your husband also wholly owns a company that carries on a newsagency business. You yourself have no other involvement with the newsagency business. Under subsection (4), you disregard the newsagency company’s assets in working out whether you satisfy the maximum net asset value test because, although the company is “connected” with you, it is so connected only because of your affiliate (your husband). Note: The meaning of connected with is affected by section 152 ‑ 78. Effect of look ‑ through earnout rights (5) Despite subsections (1) to (4), in working out the net value of the CGT assets of an entity at the time just before the * CGT event (the valuing time ), you can make a choice under subsection (6) if: (a) at the valuing time, one or more of the entity’s * CGT assets were assets for which the entity later provided, or was later provided with, one or more * financial benefits under one or more * look ‑ through earnout rights that were in existence at the valuing time; or (b) at the valuing time, one or more of the entity’s CGT assets were look ‑ through earnout rights relating to CGT assets of: (i) one or more of the other entities referred to in section 152 ‑ 15; or (ii) one or more entities not referred to in that section; or (c) you are the entity, and: (i) the CGT event referred to in section 152 ‑ 15 happened because you * disposed of a CGT asset; and (ii) your * capital proceeds from the disposal were affected by one or more financial benefits provided to, or by, you under one or more look ‑ through earnout rights; and no further financial benefits can be provided under any of those look ‑ through earnout rights. Note: For paragraph (c), capital proceeds can be affected by financial benefits provided under a look ‑ through earnout right (see section 116 ‑ 120). (6) You can choose to treat the * market value of each of the * CGT assets first mentioned in the applicable paragraph of subsection (5) as if it were, at the valuing time, equal to: (a) if paragraph (5)(a) applies—the first element of the CGT asset’s * cost base at the valuing time; or (b) if subparagraph (5)(b)(i) applies—nil; or (c) if subparagraph (5)(b)(ii) applies—the total of the financial benefits provided under the * look ‑ through earnout right after the valuing time; or (d) if paragraph (5)(c) applies—those * capital proceeds. Note: For paragraph (a), the first element of a CGT asset’s cost base can be affected by financial benefits provided under a look ‑ through earnout right (see section 112 ‑ 36). (7) In working out the net value of the CGT assets of an entity at the valuing time, if: (a) you make a choice under subsection (6) about a * CGT asset of the entity that is a CGT asset covered by paragraph (5)(a) or (c); and (b) a * look ‑ through earnout right covered by that paragraph is also a CGT asset of the entity; treat the * market value of that right as if it were nil at the valuing time.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 80 of 2007, effective 21 June 2007 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011 | Amended by No 10 of 2016, effective Sch 1 (items 1–32, 38, 39) and Sch 2 (items 3–9, 30): 26 Feb 2016 (s 2(1) items 2, 4)

s 152-35 — Active asset test

(1) A * CGT asset satisfies the active asset test if: (a) you have owned the asset for 15 years or less and the asset was an * active asset of yours for a total of at least half of the period specified in subsection (2); or (b) you have owned the asset for more than 15 years and the asset was an active asset of yours for a total of at least 7 1 / 2 years during the period specified in subsection (2). (2) The period: (a) begins when you * acquired the asset; and (b) ends at the earlier of: (i) the * CGT event; and (ii) if the relevant business ceased to be carried on in the 12 months before that time or any longer period that the Commissioner allows—the cessation of the business.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-40 — Meaning of active asset

(1) A * CGT asset is an active asset at a time if, at that time: (a) you own the asset (whether the asset is tangible or intangible) and it is used, or held ready for use, in the course of carrying on a * business that is carried on (whether alone or in partnership) by: (i) you; or (ii) your * affiliate; or (iii) another entity that is * connected with you; or (b) if the asset is an intangible asset—you own it and it is inherently connected with a business that is carried on (whether alone or in partnership) by you, your affiliate, or another entity that is connected with you. Note 1: An intangible asset need satisfy only paragraph (a) or paragraph (b). Note 2: The meaning of connected with in subparagraph (1)(a)(iii) and paragraph (b) is affected by section 152 ‑ 78. Note 3: An example of an asset that is inherently connected with a business is goodwill or the benefit of a restrictive covenant. Note 4: For businesses that are winding up, see section 152 ‑ 49 and subsection 328 ‑ 110(5). (2) Subsection 392 ‑ 20(1) is disregarded in determining, for the purposes of subsection (1) of this section, whether an entity is carrying on a * business. Note: An entity would be taken to be carrying on a primary production business under subsection 392 ‑ 20(1) if the business is carried on by a trust and the entity is presently entitled to trust income. (3) A * CGT asset is also an active asset at a given time if, at that time, you own it and: (a) it is either a * share in a company that is an Australian resident at that time or an interest in a trust that is a * resident trust for CGT purposes for the income year in which that time occurs; and (b) the total of: (i) the * market values of the active assets of the company or trust; and (ii) the market value of any financial instruments of the company or trust that are inherently connected with a business that the company or trust carries on; and (iii) any cash of the company or trust that is inherently connected with such a business; is 80% or more of the market value of all of the assets of the company or trust. (3A) A * share in a company, or an interest in a trust, mentioned in paragraph (3)(a) is an active asset at a time (the later time ) if: (a) the share or interest was an active asset at an earlier time; and (b) it is reasonable to conclude that the share or interest is still an active asset at the later time. Note: This ensures that the 80% test does not need to be applied on a day to day basis. (3B) A * share in a company, or an interest in a trust, mentioned in paragraph (3)(a) is an active asset at a time if: (a) the share or interest fails to meet the requirements under subsection (3) at that time; and (b) the failure is of a temporary nature only. Note: If a share in a company or an interest in a trust is chosen as a replacement asset, this ensures that a temporary failure of the 80% test does not automatically lead to CGT event J2 happening. Exceptions (4) However, the following * CGT assets cannot be active assets : (a) interests in an entity that is * connected with you, other than * shares and interests covered by subsection (3); (b) shares in a company, other than: (i) shares in a * widely held company that are covered by subsection (3), (3A) or (3B) and held by a * CGT concession stakeholder of the company; and (ii) shares in any other company that are covered by subsection (3), (3A) or (3B); (c) interests in a trust, other than: (i) interests in a trust to which subsection (5) applies that are covered by subsection (3), (3A) or (3B) and held by a CGT concession stakeholder of the trust; and (ii) interests in any other trust that are covered by subsection (3), (3A) or (3B); (d) financial instruments (such as loans, debentures, bonds, promissory notes, futures contracts, forward contracts, currency swap contracts and a right or option in respect of a share, security, loan or contract); (e) an asset whose main use by you is to * derive interest, an annuity, rent, royalties or foreign exchange gains unless: (i) the asset is an intangible asset and has been substantially developed, altered or improved by you so that its * market value has been substantially enhanced; or (ii) its main use for deriving rent was only temporary. Example: A company uses a house purely as an investment property and rents it out. The house is not an active asset because the company is not using the house in the course of carrying on a business. If, on the other hand, the company ran the house as a guest house the house would be an active asset because the company would be using it to carry on a business and not to derive rent. Note: The meaning of connected with is affected by section 152 ‑ 78. (4A) For the purposes of paragraph (4)(e), in determining the main use of an asset: (a) disregard any personal use or enjoyment of the asset by you; and (b) treat any use by your * affiliate, or an entity that is * connected with you, as your use. Note: The meaning of connected with is affected by section 152 ‑ 78. (5) This subsection applies to a trust if: (a) interests in the trust are listed for quotation in the official list of an * approved stock exchange; or (b) the trust has more than 50 * members, unless the trust is a discretionary trust or a trust where at least one of the following conditions is met during an income year: (i) no more than 20 persons held, or had the right to acquire or become the holders of, * membership interests representing at least 75% of the value of the membership interests in the trust; (ii) if there are * trust voting interests in the trust—at least 75% of the trust voting interests in the trust was capable of being controlled by no more than 20 persons; (iii) at least 75% of the amount of any distribution made by the trustee during the year was made to no more than 20 persons; (iv) if no distribution was made by the trustee during the year—the Commissioner is of the opinion that, if a distribution had been made during the year, at least 75% of the distribution would have been made to no more than 20 persons.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 101 of 2003, effective s. 4, Schedule 1 (items 2–20, 22), Schedule 2 (items 1–12), Schedule 3 (items 2–6) and Schedule 6 (items 16, 22–25, 27, 28, 30): Royal Assent s. 5: 11 Oct 2002 Sch 6 (items 17–19): 1 July 1997 (s 2(1) items 17, 18) Sch 6 (items 20, 21): 21 Dec 2000 (s 2(1) items 19, 20) Sch 6 (item 26): 10 Dec 1999 (s 2(1) item 22) Sch 6 (item 29): 30 June 2000 (s 2(1) item 25) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 80 of 2007, effective 21 June 2007 | Amended by No 14 of 2009, effective Schedule 1, Schedule 4 (items 11–34, 52) and Schedule 5 (items 7–13): Royal Assent Schedule 5 (items 2, 3, 14): 29 Jan 2009 Schedule 5 (items 5, 6): 1 July 2011 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 152-45 — Continuing time periods for involuntary disposals

Asset compulsorily acquired, lost or destroyed (1) If a * CGT asset is an asset (the new asset ) you acquired to satisfy the requirement in subsection 124 ‑ 70(2) or 124 ‑ 75(2) for a roll ‑ over under Subdivision 124 ‑ B, then the active asset test in section 152 ‑ 35 applies as if: (a) you had acquired the new asset when you acquired the old asset; and (b) the new asset had been your * active asset at all times when the original asset was your active asset; and (c) the new asset had not been your active asset at all times when the original asset was not your active asset. Note 1: Subdivision 124 ‑ B allows you to choose a roll ‑ over if your CGT asset is compulsorily acquired, lost or destroyed. Note 2: If this subsection applies to a CGT asset, then section 152 ‑ 115 (which is about continuing time periods) will apply for the 15 ‑ year exemption. Assets replaced during FSR transition (same owner roll ‑ overs) (1A) If a * CGT asset is an asset (the new asset ) you acquired in a situation covered by former section 124 ‑ 880, 124 ‑ 885 or 124 ‑ 890, then the active asset test in section 152 ‑ 35 applies as if: (a) you had acquired the new asset when you acquired the original asset; and (b) the new asset had been your * active asset at all times when the original asset was your active asset; and (c) the new asset had not been your active asset at all times when the original asset was not your active asset. Note 1: Former Subdivision 124 ‑ O provided a roll ‑ over for certain CGT assets that came to an end as a result of an FSR transition. Note 2: If this subsection applies to a CGT asset, then section 152 ‑ 115 (which is about continuing time periods) will apply for the 15 ‑ year exemption. Assets replaced during FSR transition (new owner roll ‑ overs) (1B) If a * CGT asset is an asset (the new asset ) acquired in a situation covered by former section 124 ‑ 900, 124 ‑ 905 or 124 ‑ 910, then the active asset test in section 152 ‑ 35 applies as if: (a) the new owner had acquired the new asset when the original owner acquired the original asset; and (b) the new asset had been the * active asset of the new owner at all times when the original asset was the original owner’s active asset; and (c) the new asset had not been the active asset of the new owner at all times when the original asset was not the original owner’s active asset. Note 1: Former Subdivision 124 ‑ O provided a roll ‑ over for certain CGT assets that came to an end as a result of an FSR transition. Note 2: If this subsection applies to a CGT asset, then section 152 ‑ 115 (which is about continuing time periods) will apply for the 15 ‑ year exemption. Marriage or relationship breakdowns (2) If you were the transferee of a * CGT asset for which there has been a roll ‑ over under Subdivision 126 ‑ A, then you may choose that the active asset test in section 152 ‑ 35 applies as if: (a) you had acquired the asset when the transferor acquired the asset; and (b) the asset had been an * active asset of yours at all times when the asset was an active asset of the transferor; and (c) the asset had not been an active asset of yours at all times when the asset was not an active asset of the transferor. Note 1: Section 103 ‑ 25 tells you when the choice must be made. Note 2: There is a roll ‑ over under Subdivision 126 ‑ A if CGT assets are transferred because of a marriage or relationship breakdown. Note 3: If you don’t make the choice, the time of acquisition is simply the time of the transfer. Note 4: Making the choice here has certain consequences for the 15 ‑ year exemption: see section 152 ‑ 115.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 101 of 2004, effective s. 4, Schedule 1 (items 2–4), Schedule 9, Schedule 10 (items 7–37) and Schedule 11 (items 144–146): Royal Assent Sch 2 and Sch 7 (items 1–8): 30 June 2003 (s 2(1) items 3, 8) Sch 3: 1 July 2003 (s 2(1) item 4) Sch 11 (item 35): 30 June 2000 (s 2(1) item 13) Sch 11 (items 52–59, 88, 89): 1 July 2000 (s 2(1) item 14) Sch 11 (items 141–143): 1 July 2001 (s 2(1) item 16) | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008 | Amended by No 109 of 2014, effective Sch 10 (items 13–15, 21–48): 17 Oct 2014 (s 2(1) item 8)

s 152-47 — Spouses or children taken to be affiliates for certain passively held CGT assets

(1) This section applies if: (a) one entity (the asset owner ) owns a * CGT asset (whether the asset is tangible or intangible); and (b) either: (i) the asset is used, or held ready for use, in the course of carrying on a * business in an income year by another entity (the business entity ); or (ii) the asset is inherently connected with a business that is carried on in an income year by another entity (the business entity ); and (c) the business entity is not (apart from this section) an * affiliate of, or * connected with, the asset owner. Note: The meaning of connected with an entity is affected by section 152 ‑ 78. (2) For the purposes of this Subdivision, in determining whether the business entity is an * affiliate of, or is * connected with, the asset owner, take the following to be affiliates of an individual: (a) a * spouse of the individual; (b) a * child of the individual, being a child who is under 18 years. (3) If an entity is an * affiliate of, or * connected with, another entity as a result of subsection (2), then the * spouse or * child mentioned in that subsection is, in addition, taken to be an affiliate of the individual for the purposes of this Subdivision, and for the purposes of sections 328 ‑ 110 to 328 ‑ 125 to the extent that they relate to this Subdivision. Example: The spouse or child mentioned in subsection (2) is taken to be an affiliate of the individual for the purposes of working out which entities are affiliates of or connected with entities under section 152 ‑ 48. (4) To avoid doubt, subsection (2) applies: (a) for the purposes of reducing or disregarding, under this Division, any * capital gain from any * CGT asset; but (b) only while: (i) a * spouse remains a spouse; or (ii) a * child remains a child who is under 18 years.

Amendment history: Inserted by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 152-48 — Working out an entity’s aggregated turnover for passively held CGT assets

(1) This section applies for the purposes of section 328 ‑ 115 to determine whether an entity (the test entity ) is a * CGT small business entity for the purposes of subsection 152 ‑ 10(1A) or (1B). (2) An entity (the deemed entity ) is taken to be an * affiliate of, or * connected with, the test entity (as the case requires) if: (a) the deemed entity is an affiliate of, or connected with, the entity that owns the * CGT asset referred to in subsection 152 ‑ 10(1A) or (1B); and (b) the deemed entity is not (apart from this section) an affiliate of, or connected with, the test entity. Note: Paragraphs (a) and (b)—the meaning of connected with is affected by section 152 ‑ 78. (3) If: (a) the entity that owns the * CGT asset referred to in subsection 152 ‑ 10(1B) is a partner in 2 or more partnerships; and (b) the asset is: (i) used, or held ready for use, in the course of carrying on a * business that is carried on by at least 2 of those partnerships; or (ii) inherently connected with businesses that are carried on by at least 2 of those partnerships; then, each partnership referred to in paragraph (b) that is not (apart from this section) * connected with the test entity is taken to be connected with the test entity.

Amendment history: Inserted by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011 | Amended by No 41 of 2017, effective Sch 2 (item 1), Sch 3 (items 1–21), Sch 4 (items 1–29) and Sch 5 (items 1, 2): 1 July 2016 (s 2(1) items 9, 14, 16, 18) Sch 2 (item 2) and Sch 5 (items 17, 18): repealed before commencing (s 2(1) items 10, 20) Sch 2 (item 3) and Sch 5 (items 19, 20): 1 July 2020 (s 2(1) items 11, 21) Sch 2 (item 4) and Sch 5 (items 21, 22): 1 July 2021 (s 2(1) items 12, 22) Sch 2 (item 5), Sch 3 (item 22) and Sch 4 (item 58): 19 May 2017 (s 2(1) items 13, 15, 17) Sch 5 (items 3–8): 1 July 2017 (s 2(1) item 19)

s 152-49 — Businesses that are winding up

(1) This section applies to an entity in an income year (the CGT event year ) if: (a) a * business that the entity previously carried on (including in partnership) is being wound up in that year; and (b) either: (i) the asset was used, or held ready for use, in the course of carrying on the business at a time in the income year in which the business stopped being carried on; or (ii) if the asset is an intangible asset—the asset was inherently connected with the business that was carried on at a time in the income year in which the business stopped being carried on. (2) For the purposes of paragraphs 152 ‑ 40(1)(a) and (b) as they apply for the purposes of paragraphs 152 ‑ 10(1A)(d) and (1B)(e): (a) the entity is taken to carry on the * business at a time in the CGT event year; and (b) either: (i) the * CGT asset is taken to be used, or held ready for use, in the course of carrying on the business at that time; or (ii) if the asset is an intangible asset—the CGT asset is taken to be inherently connected with the business at that time. Note: The entity might also be taken to be a small business entity in the CGT event year (see subsection 328 ‑ 110(5)).

Amendment history: Inserted by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011

s 152-50 — Significant individual test

An entity satisfies the significant individual test if the entity had at least one * significant individual just before the * CGT event.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-55 — Meaning of significant individual

An individual is a significant individual in a company or a trust at a time if, at that time, the individual has a * small business participation percentage in the company or trust of at least 20%.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-60 — Meaning of CGT concession stakeholder

An individual is a CGT concession stakeholder of a company or trust at a time if the individual is: (a) a * significant individual in the company or trust; or (b) a spouse of a significant individual in the company or trust, if the spouse has a * small business participation percentage in the company or trust at that time that is greater than zero.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-65 — Small business participation percentage

An entity’s small business participation percentage in another entity at a time is the percentage that is the sum of: (a) the entity’s * direct small business participation percentage in the other entity at that time; and (b) the entity’s * indirect small business participation percentage in the other entity at that time.

Amendment history: Inserted by No 55 of 2007, effective 12 Apr 2007

s 152-70 — Direct small business participation percentage

(1) An entity holds a direct small business participation percentage at the relevant time in an entity equal to the percentage worked out using this table: An entity’s direct small business participation percentage In this entity: Is: 1 A company This percentage that the entity has because of holding the legal and equitable interests in * shares in the company: (a) the percentage of the voting power in the company; or (b) the percentage of any * dividend that the company may pay; or (c) the percentage of any distribution of capital that the company may make; or, if they are different, the smaller or smallest. 2 A trust (where entities have entitlements to all the income and capital of the trust) This percentage: (a) the percentage of any distribution of income that the trustee may make to which the entity would be beneficially entitled; or (b) the percentage of any distribution of capital that the trustee may make to which the entity would be beneficially entitled; or, if they are different, the smaller. 3 A trust (where entities do not have entitlements to all the income and capital of the trust) This percentage: (a) if the trustee makes distributions of income during the income year (the relevant year ) in which that time occurs—the percentage of the distributions to which the entity was beneficially entitled; or (b) if the trustee makes distributions of capital during the relevant year—the percentage of the distributions to which the entity was beneficially entitled; or, if 2 different percentages are applicable, the smaller. Companies (2) For item 1 of the table, ignore * redeemable shares. (3) Paragraph (a) of item 1 of the table does not apply if the entity holds the legal and equitable interests in the * shares jointly with another entity. Discretionary trusts (4) Subsections (5) and (6) apply for the purpose of working out the * direct small business participation percentage in an entity in connection with a * CGT event that happened in an income year (the CGT event year ), if: (a) the entity is a trust (where entities do not have entitlements to all the income and capital of the trust); and (b) during the relevant year mentioned in item 3 of the table in subsection (1) (disregarding subsection (5)), the trustee mentioned in that item: (i) does not make a distribution of income; and (ii) does not make a distribution of capital. (5) Treat the references in that item to the relevant year as being references to: (a) if the trustee made a distribution of income or capital during the CGT event year—the CGT event year; or (b) otherwise—the last income year before the CGT event year in which the trustee did make a distribution of income or capital. (6) Despite subsection (5), an entity holds a direct small business participation percentage of 0% in the trust at the relevant time if either: (a) the trust: (i) had a * net income for the relevant year; and (ii) did not have a * tax loss for the relevant year; or (b) the trustee did not make a distribution of income or capital at any time before the end of the CGT event year.

Amendment history: Inserted by No 55 of 2007, effective 12 Apr 2007 | Amended by No 12 of 2012, effective s 4, Sch 2 (items 1–23), Sch 5 and Sch 6 (items 3–6, 11–20, 25, 26, 35–67, 74–83, 94–96, 117–142, 157–178, 183, 200–203, 214–217, 235–240, 248): 21 Mar 2012 (s 2(1) items 1, 3, 5, 6, 10, 14, 18, 19, 27, 31) Sch 6 (item 7): 1 July 2007 (s 2(1) item 7) Sch 6 (item 10): 1 July 2010 (s 2(1) item 9) Sch 6 (items 106–116): 22 Mar 2012 (s 2(1) items 16, 17) Sch 6 (item 143): 22 Jan 2013 (s 2(1) item 20) Sch 6 (items 146–148): never commenced (s 2(1) item 23) Sch 6 (items 179, 181): 3 Oct 2008 (s 2(1) items 28, 30) Sch 6 (item 180): 3 June 2010 (s 2(1) item 29)

s 152-75 — Indirect small business participation percentage

(1) Work out the indirect small business participation percentage that an entity (the holding entity ) holds at a particular time in another entity (the test entity ) by multiplying: (a) the holding entity’s * direct small business participation percentage (if any) in another entity (the intermediate entity ) at that time; by (b) the sum of: (i) the intermediate entity’s direct small business participation percentage (if any) in the test entity at that time; and (ii) the intermediate entity’s indirect small business participation percentage (if any) in the test entity at that time (as worked out under one or more other applications of this section). Note: When testing an intermediate entity’s indirect small business participation percentage in another entity, the intermediate entity becomes the holding entity. (2) If there is more than one intermediate entity to which paragraph (1)(a) applies at that time, the holding entity’s indirect small business participation percentage is the sum of the percentages worked out under subsection (1) in relation to each of those intermediate entities. Example: The individual mentioned in the diagram has an indirect small business participation percentage in the unit trust. Multiplying the percentages as mentioned in subsection (1) produces small business participation percentage of 43.2%. If the individual had a direct small business participation percentage of 10% in the unit trust, that would be added to the individual’s indirect small business participation percentage to produce a small business participation percentage in the trust of 53.2%.

Amendment history: Inserted by No 55 of 2007, effective 12 Apr 2007

s 152-78 — Trustee of discretionary trust may nominate beneficiaries to be controllers of trust

(1) This section applies for the purposes of determining whether an entity is * connected with you, for the purposes of: (a) this Subdivision; and (b) sections 328 ‑ 110, 328 ‑ 115 and 328 ‑ 125 so far as they relate to this Subdivision. (2) The trustee of a discretionary trust may nominate not more than 4 beneficiaries as being controllers of the trust for an income year (the relevant income year ) for which the trustee did not make a distribution of income or capital if the trust had a * tax loss, or no * net income, for that year. (3) A nomination under subsection (2) has effect as if each nominated beneficiary controlled the trust for the relevant income year in a way described in section 328 ‑ 125. Note: This means each nominated beneficiary is connected with the trust. (4) A nomination under subsection (2) must: (a) be in writing; and (b) be signed by the trustee and by each nominated beneficiary.

Amendment history: Inserted by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 152-80 — CGT event happens to an asset or interest within 2 years of individual’s death

(1) This section applies if: (a) a * CGT asset: (i) forms part of the estate of a deceased individual; or (ii) was owned by joint tenants and one of them dies; and (b) any of the following applies: (i) the asset devolves to the individual’s * legal personal representative; (ii) the asset * passes to a beneficiary of the individual; (iii) an interest in the asset is * acquired by the surviving joint tenant or tenants (as the case may be) as mentioned in section 128 ‑ 50; (iv) the asset devolves to a trustee of a trust established by the will of the individual; and (c) the deceased individual referred to in subparagraph (a)(i) or (ii) would have been entitled to reduce or disregard a * capital gain under this Division if a * CGT event had happened in relation to the CGT asset immediately before his or her death; and (d) a CGT event happens in relation to the CGT asset within 2 years of the individual’s death. (2) A person mentioned in subsection (2A) is entitled to reduce or disregard a * capital gain under this Division in the same way as the deceased individual would have been entitled to as if: (a) paragraph 152 ‑ 105(d) only required the deceased individual to have been 55 or over, or permanently incapacitated, at the time of the * CGT event referred to in paragraph (1)(c) of this section; and (b) paragraph 152 ‑ 305(1)(b) did not apply. (2A) The following persons (as the case requires) are entitled to reduce or disregard a * capital gain under this Division in accordance with subsection (2): (a) the * legal personal representative of the individual; (b) the beneficiary of the individual; (c) the surviving joint tenant or tenants; (d) the trustee or a beneficiary of the trust. (3) The Commissioner may extend the time limit in paragraph (1)(d).

Amendment history: Inserted by No 55 of 2007, effective 12 Apr 2007 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011

s 152-100 — What this Subdivision is about

A CGT small business entity can disregard a capital gain arising from a CGT asset that it has owned for at least 15 years if certain conditions are met. Capital losses are not affected. Also, any amount of income a company or trust derives from a CGT event covered by this Subdivision is neither assessable income nor exempt income. If the company or trust makes payments to its CGT concession stakeholders that are attributable to the exempt amount, the payments will not be taken into account in determining the taxable income of the company, trust or recipient. The main conditions are that: • the basic conditions for relief in Subdivision 152 ‑ A are satisfied; • the entity continuously owned the asset for the 15 ‑ year period leading up to the CGT event; • if the entity is an individual, the individual retires or is permanently incapacitated; • if the entity is a company or trust, the entity had a significant individual for a total of at least 15 years during which the entity owned the asset and the individual who was the significant individual just before the CGT event retires or is permanently incapacitated. The Subdivision also allows time periods to continue to run if there has been a roll ‑ over because of marriage or relationship breakdown or compulsory acquisition. Table of sections 152 ‑ 105 15 ‑ year exemption for individuals 152 ‑ 110 15 ‑ year exemption for companies and trusts 152 ‑ 115 Continuing time periods for involuntary disposals 152 ‑ 125 Payments to company’s or trust’s CGT concession stakeholders are exempt

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008 | Amended by No 41 of 2017, effective Sch 2 (item 1), Sch 3 (items 1–21), Sch 4 (items 1–29) and Sch 5 (items 1, 2): 1 July 2016 (s 2(1) items 9, 14, 16, 18) Sch 2 (item 2) and Sch 5 (items 17, 18): repealed before commencing (s 2(1) items 10, 20) Sch 2 (item 3) and Sch 5 (items 19, 20): 1 July 2020 (s 2(1) items 11, 21) Sch 2 (item 4) and Sch 5 (items 21, 22): 1 July 2021 (s 2(1) items 12, 22) Sch 2 (item 5), Sch 3 (item 22) and Sch 4 (item 58): 19 May 2017 (s 2(1) items 13, 15, 17) Sch 5 (items 3–8): 1 July 2017 (s 2(1) item 19)

s 152-105 — 15 ‑ year exemption for individuals

If you are an individual, you can disregard any * capital gain arising from a * CGT event if all of the following conditions are satisfied: (a) the basic conditions in Subdivision 152 ‑ A are satisfied for the gain; (b) you continuously owned the * CGT asset for the 15 ‑ year period ending just before the CGT event; Note: Section 152 ‑ 115 allows for continuation of the period if there is an involuntary disposal of the asset. (c) if the CGT asset is a * share in a company or an interest in a trust—the company or trust had a * significant individual for a total of at least 15 years (even if the 15 years was not continuous and it was not always the same significant individual) during which you owned the CGT asset; (d) either: (i) you are 55 or over at the time of the CGT event and the event happens in connection with your retirement; or (ii) you are permanently incapacitated at the time of the CGT event.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 12 of 2012, effective s 4, Sch 2 (items 1–23), Sch 5 and Sch 6 (items 3–6, 11–20, 25, 26, 35–67, 74–83, 94–96, 117–142, 157–178, 183, 200–203, 214–217, 235–240, 248): 21 Mar 2012 (s 2(1) items 1, 3, 5, 6, 10, 14, 18, 19, 27, 31) Sch 6 (item 7): 1 July 2007 (s 2(1) item 7) Sch 6 (item 10): 1 July 2010 (s 2(1) item 9) Sch 6 (items 106–116): 22 Mar 2012 (s 2(1) items 16, 17) Sch 6 (item 143): 22 Jan 2013 (s 2(1) item 20) Sch 6 (items 146–148): never commenced (s 2(1) item 23) Sch 6 (items 179, 181): 3 Oct 2008 (s 2(1) items 28, 30) Sch 6 (item 180): 3 June 2010 (s 2(1) item 29)

s 152-110 — 15 ‑ year exemption for companies and trusts

(1) An entity that is a company or trust can disregard any * capital gain arising from a * CGT event if all of the following conditions are satisfied: (a) the basic conditions in Subdivision 152 ‑ A are satisfied for the gain; (b) the entity continuously owned the * CGT asset for the 15 ‑ year period ending just before the CGT event; Note: Section 152 ‑ 115 allows for continuation of the period if there is an involuntary disposal of the asset. (c) the entity had a * significant individual for a total of at least 15 years (even if the 15 years was not continuous and it was not always the same significant individual) during which the entity owned the CGT asset; (d) an individual who was a significant individual of the company or trust just before the CGT event either: (i) was 55 or over at that time and the event happened in connection with the individual’s retirement; or (ii) was permanently incapacitated at that time. (1A) For the purposes of paragraphs (1)(b) and (c), disregard subsection 149 ‑ 30(1A) (which applies if an asset stops being a pre ‑ CGT asset). (2) Any * ordinary income or * statutory income the company or trust * derives from a * CGT event that would be covered by subsection (1) (assuming the event gave rise to a * capital gain, even if it didn’t) is neither assessable income nor * exempt income. Exception (3) However, subsection (2) does not apply to income * derived by a company or trust as a result of a * balancing adjustment event occurring to a * depreciating asset: (a) whose decline in value is worked out under Division 40; or (b) deductions for which are calculated under Division 328.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 119 of 2002, effective s 4, Sch 1 (items 2–5, 8), Sch 2 and Sch 3 (item 100): 2 Dec 2002 (s 2(1) items 1, 2, 10) Sch 1 (items 6, 7): ( see Sch 10 (item 242) of Act No. 41, 2005) Sch 3 (items 4–78): 30 June 2001 (s 2(1) items 3–8) | Amended by No 66 of 2003, effective s 4, Sch 2 (items 1–5, 17), Sch 3 (items 49–70, 71–128, 129–131, 140, 141), Sch 4, Sch 6 (items 1, 3) and Sch 7 (items 6–9): 30 June 2003 (s 2(1) items 1, 3, 6–8, 8B–12, 12B, 14, 15, 17, 18) Sch 3 (items 70A, 128A): 2 Apr 2003 (s 2(1) items 8A, 12A) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010 | Amended by No 12 of 2012, effective s 4, Sch 2 (items 1–23), Sch 5 and Sch 6 (items 3–6, 11–20, 25, 26, 35–67, 74–83, 94–96, 117–142, 157–178, 183, 200–203, 214–217, 235–240, 248): 21 Mar 2012 (s 2(1) items 1, 3, 5, 6, 10, 14, 18, 19, 27, 31) Sch 6 (item 7): 1 July 2007 (s 2(1) item 7) Sch 6 (item 10): 1 July 2010 (s 2(1) item 9) Sch 6 (items 106–116): 22 Mar 2012 (s 2(1) items 16, 17) Sch 6 (item 143): 22 Jan 2013 (s 2(1) item 20) Sch 6 (items 146–148): never commenced (s 2(1) item 23) Sch 6 (items 179, 181): 3 Oct 2008 (s 2(1) items 28, 30) Sch 6 (item 180): 3 June 2010 (s 2(1) item 29)

s 152-115 — Continuing time periods for involuntary disposals

Asset compulsorily acquired, lost or destroyed (1) If a * CGT asset is an asset (the new asset ) you acquired to satisfy the requirement in subsection 124 ‑ 70(2) or 124 ‑ 75(2) for a roll ‑ over under Subdivision 124 ‑ B, then paragraphs 152 ‑ 105(b) and 152 ‑ 110(1)(b) and (c) (the 15 ‑ year and significant individual rules) apply as if you had acquired the new asset when you acquired the original asset. Note: Subdivision 124 ‑ B allows you to choose a roll ‑ over if your CGT asset is compulsorily acquired, lost or destroyed. Assets replaced during FSR transition (same owner roll ‑ overs) (1A) If a * CGT asset is an asset (the new asset ) you acquired in a situation covered by former section 124 ‑ 880, 124 ‑ 885 or 124 ‑ 890, then paragraphs 152 ‑ 105(b) and 152 ‑ 110(1)(b) and (c) (the 15 ‑ year and significant individual rules) apply as if you had acquired the new asset when you acquired the original asset. Note: Former Subdivision 124 ‑ O provided a roll ‑ over for certain CGT assets that came to an end as a result of an FSR transition. Asset replaced during FSR transition (new owner roll ‑ overs) (1B) If a * CGT asset is an asset (the new asset ) acquired in a situation covered by former section 124 ‑ 900, 124 ‑ 905 or 124 ‑ 910, then paragraphs 152 ‑ 105(b) and 152 ‑ 110(1)(b) and (c) (the 15 ‑ year and significant individual rules) apply as if the new owner had acquired the new asset when the original owner acquired the original asset. Note: Former Subdivision 124 ‑ O provided a roll ‑ over for certain CGT assets that came to an end as a result of an FSR transition. Marriage or relationship breakdowns (2) If you made the choice mentioned in subsection 152 ‑ 45(2) for a * CGT asset, then paragraphs 152 ‑ 105(b) and (c) and 152 ‑ 110(1)(b) and (c) (the 15 ‑ year and significant individual rules) apply as if you had acquired the asset when the transferor acquired it. Note: There is a roll ‑ over under Subdivision 126 ‑ A if CGT assets are transferred because of a marriage or relationship breakdown. Restructures of small businesses (3) If section 328 ‑ 450 or 328 ‑ 455 applies in relation to the transfer of an asset to you, then paragraphs 152 ‑ 105(b) and (c) and 152 ‑ 110(1)(b) and (c) (the 15 ‑ year and significant individual rules) apply as if: (a) you had acquired the asset when the entity transferring the asset acquired it; or (b) in a case where, for the purposes of applying those paragraphs, the time when that entity acquired the asset was provided for by this subsection—you had acquired the asset at that time.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 101 of 2004, effective s. 4, Schedule 1 (items 2–4), Schedule 9, Schedule 10 (items 7–37) and Schedule 11 (items 144–146): Royal Assent Sch 2 and Sch 7 (items 1–8): 30 June 2003 (s 2(1) items 3, 8) Sch 3: 1 July 2003 (s 2(1) item 4) Sch 11 (item 35): 30 June 2000 (s 2(1) item 13) Sch 11 (items 52–59, 88, 89): 1 July 2000 (s 2(1) item 14) Sch 11 (items 141–143): 1 July 2001 (s 2(1) item 16) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008 | Amended by No 109 of 2014, effective Sch 10 (items 13–15, 21–48): 17 Oct 2014 (s 2(1) item 8) | Amended by No 18 of 2016, effective 1 Apr 2016 (s 2(1) item 1)

s 152-125 — Payments to company’s or trust’s CGT concession stakeholders are exempt

(1) This section applies if: (a) one or more of the following apply: (i) under section 152 ‑ 110, a * capital gain (the exempt amount ) of a company or trust is disregarded; (ii) under section 152 ‑ 110, an amount of income (the exempt amount ) is * non ‑ assessable non ‑ exempt income of a company or trust; (iii) subparagraph (i) of this paragraph would have applied to an amount (the exempt amount ) except that the capital gain was disregarded anyway because the relevant * CGT asset was * acquired before 20 September 1985; (iv) subparagraph (i) of this paragraph would have applied to an amount (the exempt amount ) if subsection 149 ‑ 30(1A) and section 149 ‑ 35 had not applied to the relevant asset; and (b) the company or trust makes one or more payments relating to the exempt amount to an individual (whether directly or indirectly through one or more interposed entities) before the later of: (i) 2 years after the relevant * CGT event; and (ii) if the relevant CGT event happened because the company or trust * disposed of the relevant CGT asset—6 months after the latest time a possible * financial benefit becomes or could become due under a * look ‑ through earnout right relating to that CGT asset and the disposal; and (c) the individual was a * CGT concession stakeholder of the company or trust just before the relevant CGT event. Note: A normal business payment, for example, a payment of wages, would not be made “in relation to the exempt amount”. (2) In determining the taxable income of the company, the trust, the individual, or any of the interposed entities, disregard the total amount of the payment or payments made to the * CGT concession stakeholder, up to the following limit: where: stakeholder’s participation percentage means: (a) in the case of a company or a trust referred to in item 2 of the table in subsection 152 ‑ 70(1)—the stakeholder’s * small business participation percentage in the company or trust just before the relevant * CGT event; or (b) in the case of a trust referred to in item 3 of that table—the amount (expressed as a percentage) worked out using the following formula: (3) If a company makes such a payment, this Act applies to the payment, to the extent that it is less than or equal to the limit mentioned in subsection (2), as if: (a) it were not a * dividend; and (b) it were not a * frankable distribution. (4) The Commissioner may extend the time limit under paragraph (1)(b).

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007 | Amended by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010 | Amended by No 10 of 2016, effective Sch 1 (items 1–32, 38, 39) and Sch 2 (items 3–9, 30): 26 Feb 2016 (s 2(1) items 2, 4)

s 152-200 — What this Subdivision is about

This Subdivision tells you how to apply the small business CGT concessions mentioned in step 6 of the method statement in subsection 102 ‑ 5(1). A capital gain is reduced by 50% if the basic conditions in Subdivision 152 ‑ A are satisfied (assuming the $2 million threshold for a small business entity to be a CGT small business entity were disregarded). If the capital gain has already been reduced by the discount percentage, the 50% reduction under this Subdivision applies to that reduced gain. The capital gain may be further reduced by the small business retirement exemption or a small business rollover, or both. Alternatively, you may choose not to apply the 50% reduction and instead apply the small business retirement exemption or small business rollover. None of these rules apply if the 15 ‑ year exemption already applies to the capital gain, since such a gain is disregarded anyway. Table of sections 152 ‑ 205 You get the small business 50% reduction 152 ‑ 210 You may also get the small business retirement exemption and small business roll ‑ over relief 152 ‑ 215 15 ‑ year rule has priority 152 ‑ 220 You may choose not to apply this Subdivision

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 152-205 — You get the small business 50% reduction

(1) The amount of a * capital gain remaining after applying step 5 of the method statement in subsection 102 ‑ 5(1) is reduced by 50%, if the basic conditions in Subdivision 152 ‑ A are satisfied for the gain. Note: The cost bases of CGT assets of an individual are indexed from 1 July 2027, reducing capital gains that arise after 1 July 2027. This reduction applies after indexation, allowing the indexed gain to be reduced by a further 50%. (2) In working out for the purposes of subsection (1) whether the basic conditions in Subdivision 152 ‑ A are satisfied, disregard paragraph 152 ‑ 10(1AA)(b).

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 152-210 — You may also get the small business retirement exemption and small business roll ‑ over relief

(1) The * capital gain, as reduced under section 152 ‑ 205, may also qualify for: (a) the small business retirement exemption (see Subdivision 152 ‑ D); or (b) a small business roll ‑ over (see Subdivision 152 ‑ E); or both. (2) If it qualifies for both of those concessions, you may choose which order to apply them in.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2))

s 152-215 — 15 ‑ year rule has priority

This Subdivision does not apply to a * capital gain to which Subdivision 152 ‑ B (15 ‑ year exemption) applies. Note: Under that Subdivision, such a gain is entirely disregarded, so there is no need for any further concession to apply.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 152-220 — You may choose not to apply this Subdivision

You may choose not to apply the reduction mentioned in section 152 ‑ 205 to a particular * capital gain. Note: Making this choice might allow a company or trust to make larger tax ‑ free payments under the small business retirement exemption: see section 152 ‑ 325.

Amendment history: Inserted by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 55 of 2007, effective 12 Apr 2007

s 152-300 — What this Subdivision is about

You can choose to disregard a capital gain from a CGT event happening to a CGT asset of your small business if the capital proceeds from the event are used in connection with your retirement. There is a lifetime limit of $500,000 for all choices that can be made in respect of an individual under this Subdivision. You may choose not to apply the concession in section 152 ‑ 205 (small business 50% reduction) before this one. For an additional concession, see also Subdivision 152 ‑ E (small business roll ‑ over). You do not need to satisfy the basic conditions for this exemption in relation to CGT events J5 and J6. Table of sections 152 ‑ 305 Choosing the exemption 152 ‑ 310 Consequences of choice 152 ‑ 315 Choosing the amount to disregard 152 ‑ 320 Meaning of CGT retirement exemption limit 152 ‑ 325 Company or trust conditions 152 ‑ 330 15 ‑ year rule has priority

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011

s 152-305 — Choosing the exemption

Individual (1) If you are an individual, you can choose to disregard all or part of a * capital gain if: (a) the basic conditions in Subdivision 152 ‑ A are satisfied for the gain; and (b) if you are under 55 just before you make the choice—you contribute an amount equal to the asset’s * CGT exempt amount to a * complying superannuation fund or an * RSA; and Note: For the non ‑ deductibility of the contribution, see subsection 290 ‑ 150(4). (c) the contribution is made: (i) if the relevant CGT event is CGT event J2, J5 or J6—when you made the choice; or (ii) otherwise—at the later of when you made the choice and when you received the proceeds. Note 1: Section 103 ‑ 25 tells you when the choice must be made. (1A) If you receive the * capital proceeds from the * CGT event in instalments, paragraphs (1)(b) and (c) apply to each instalment in succession (up to the asset’s * CGT exempt amount). (1B) For the purposes of (but without limiting) subsection (1A), you are treated as receiving the * capital proceeds in instalments if: (a) the * CGT event happened because you * disposed of the * CGT asset; and (b) the capital proceeds from the disposal are increased by one or more * financial benefits that you receive under a * look ‑ through earnout right. Company or trust (2) A company or a trust (except a public entity—see subsection (3)) can also choose to disregard such an amount if: (a) the basic conditions in Subdivision 152 ‑ A are satisfied for the * capital gain; and (b) the entity satisfies the significant individual test (see section 152 ‑ 50); and (c) the company or trust conditions in section 152 ‑ 325 are satisfied. Note: Section 103 ‑ 25 tells you when the choice must be made. (3) Entities of a kind referred to in subsection 328 ‑ 125(8) cannot make the choice. (4) Paragraphs (1)(a) and (2)(a) do not apply if the * capital gain arose from * CGT event J5 or J6.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 95 of 2004, effective s. 4, Schedules 2, 3, 5 and 11: Royal Assent Schedule 7 (items 1–10, 13): 1 July 2004 Schedule 10 (items 28–39, 44, 45): 1 July 2005 | Amended by No 101 of 2004, effective s. 4, Schedule 1 (items 2–4), Schedule 9, Schedule 10 (items 7–37) and Schedule 11 (items 144–146): Royal Assent Sch 2 and Sch 7 (items 1–8): 30 June 2003 (s 2(1) items 3, 8) Sch 3: 1 July 2003 (s 2(1) item 4) Sch 11 (item 35): 30 June 2000 (s 2(1) item 13) Sch 11 (items 52–59, 88, 89): 1 July 2000 (s 2(1) item 14) Sch 11 (items 141–143): 1 July 2001 (s 2(1) item 16) | Amended by No 15 of 2007, effective s 4, Sch 1 (items 150–236, 240, 242–260, 406(1)–(3)), Sch 3 (items 8–44, 66) and Sch 4 (items 1–8): 15 Mar 2007 (s 2(1) items 1, 2, 6, 8, 9) Sch 2: 12 Apr 2007 (s 2(1) item 3) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 80 of 2007, effective 21 June 2007 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 10 of 2016, effective Sch 1 (items 1–32, 38, 39) and Sch 2 (items 3–9, 30): 26 Feb 2016 (s 2(1) items 2, 4)

s 152-310 — Consequences of choice

Consequences in all cases (1) If the individual, company or trust makes the choice mentioned in section 152 ‑ 305 for any part of the * capital gain from the * CGT asset, that part of the capital gain equal to its * CGT exempt amount is disregarded. Additional consequences in relation to company or trust (2) Any payment or part of one the company or trust makes to comply with section 152 ‑ 325: (a) is not assessable income, and is not * exempt income, of the * CGT concession stakeholder to whom it is made; and (b) cannot be deducted from the company’s or trust’s assessable income. Additional consequences in relation to interposed entities (3) If: (a) an entity (the paying entity ) receives a payment (whether directly or indirectly through one or more interposed entities) that a company or trust makes to comply with section 152 ‑ 325; and (b) the paying entity passes on the payment to the * CGT concession stakeholder or another interposed entity; then: (c) the payment cannot be deducted from the paying entity’s assessable income; and (d) the payment received by the paying entity is not assessable income and is not * exempt income.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 15 of 2007, effective s 4, Sch 1 (items 150–236, 240, 242–260, 406(1)–(3)), Sch 3 (items 8–44, 66) and Sch 4 (items 1–8): 15 Mar 2007 (s 2(1) items 1, 2, 6, 8, 9) Sch 2: 12 Apr 2007 (s 2(1) item 3) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5) | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 56 of 2010, effective s. 4, Schedule 3 (items 2–7, 10(1)–(4)), Schedule 4, Schedule 5 (items 1–3, 3A, 3B, 4–53, 55–72, 78–110, 112–129, 131–136, 141–146, 146A, 147, 148, 148A, 149, 150, 150A–150F, 151–188, 193–220) and Schedule 6 (items 1–11, 19–26, 56, 57, 115, 127–155): 3 June 2010 Schedule 2 (items 2, 4): 4 June 2010 Sch 5 (item 111): 26 Mar 2009 (s 2(1) item 11B)

s 152-315 — Choosing the amount to disregard

(1) You can choose to disregard all or part of each * capital gain to which this Subdivision applies. Note 1: You make capital gains equal to any parts that you do not choose to disregard. Note 2: Section 103 ‑ 25 tells you when the choice must be made. (2) However, the choice must be made in a way that ensures that: (a) for an individual—your * CGT retirement exemption limit is not exceeded; or (b) for a company or trust—the CGT retirement exemption limit of each individual for whom the choice is made is not exceeded. (3) The amount chosen for the asset is its CGT exempt amount . (4) The * CGT exempt amount must be specified in writing. (5) If a company or trust is making the choice and it has more than one * CGT concession stakeholder, it must specify in writing the percentage of each * CGT asset’s * CGT exempt amount that is attributable to each of those stakeholders. One or more of the percentages may be nil, but all of the percentages must add up to 100%. Example: Daryl is a significant individual in a company. The company specifies 90% for Daryl under subsection (5) (which means that the percentage specified for the other stakeholder must be 10%). Daryl’s retirement exemption limit is $500,000. To determine whether subsection (2) is complied with, Daryl would take 90% of the asset’s CGT exempt amount, add that to amounts previously specified in choices made by or for him under this Subdivision and see whether the total exceeds $500,000. Note: Subsections (4) and (5) are exceptions to the general rule about choices in section 103 ‑ 25.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 55 of 2007, effective 12 Apr 2007

s 152-320 — Meaning of CGT retirement exemption limit

(1) An individual’s CGT retirement exemption limit at a time is $500,000 reduced by the * CGT exempt amounts of * CGT assets specified in choices previously made by or for the individual under this Subdivision. Note: The $500,000 is also reduced by any reduction under old provisions about reduction of the CGT retirement exemption limit: see item 62 of Schedule 1 to the New Business Tax System (Capital Gains Tax) Act 1999 . (2) If the individual was one of at least 2 * CGT concession stakeholders of a company or trust, and the company or trust made a choice for the individual, only the individual’s percentage (see subsection 152 ‑ 315(5)) of the assets’ * CGT exempt amounts is taken into account under subsection (1) for that choice.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 56 of 2010, effective s. 4, Schedule 3 (items 2–7, 10(1)–(4)), Schedule 4, Schedule 5 (items 1–3, 3A, 3B, 4–53, 55–72, 78–110, 112–129, 131–136, 141–146, 146A, 147, 148, 148A, 149, 150, 150A–150F, 151–188, 193–220) and Schedule 6 (items 1–11, 19–26, 56, 57, 115, 127–155): 3 June 2010 Schedule 2 (items 2, 4): 4 June 2010 Sch 5 (item 111): 26 Mar 2009 (s 2(1) item 11B)

s 152-325 — Company or trust conditions

Company or trust to make payments (1) A company or trust must make a payment (whether directly or indirectly through one or more interposed entities) to at least one of its * CGT concession stakeholders if: (a) the company or trust makes a choice under this Subdivision to disregard a * capital gain from * CGT event J2, J5 or J6; or (b) the company or trust receives an amount of * capital proceeds from a * CGT event for which it makes a choice under this Subdivision. (2) If the company or trust receives the * capital proceeds from the CGT event in instalments, subsection (1) applies to each instalment in succession (up to the relevant * CGT exempt amount). (2A) For the purposes of (but without limiting) subsection (2), the company or trust is treated as receiving the * capital proceeds in instalments if: (a) the * CGT event happened because the company or trust * disposed of the * CGT asset; and (b) the capital proceeds from the disposal are increased by one or more * financial benefits that the company or trust receives under a * look ‑ through earnout right. Amount and timing of payments (3) If a payment is made to more than one * CGT concession stakeholder, the amount of each such payment is to be worked out by reference to each individual’s percentage (see subsection 152 ‑ 315(5)) of the relevant * CGT exempt amount. (3A) If the * CGT concession stakeholder to whom the payment is made is an employee of the company or trust, the payment must not be of a kind mentioned in section 82 ‑ 135 (disregarding paragraph (fa) of that section). (4) The payment must be made by: (a) if paragraph (1)(a) applies—7 days after the company or trust makes the choice; and (b) otherwise—the later of: (i) 7 days after the company or trust makes the choice; and (ii) 7 days after the company or trust receives an amount of * capital proceeds from the * CGT event. (5) The amount of the payment, or the sum of the amounts of the payments, required to be made under this section must be equal to the lesser of: (a) either: (i) if paragraph (1)(a) applies—the amount of the * capital gain from the * CGT event that the company or trust disregarded; or (ii) otherwise—the amount of * capital proceeds received; and (b) the relevant * CGT exempt amount. Payments may be joint or separate (6) If this section requires the company or trust to make 2 or more payments to a single * CGT concession stakeholder (whether or not by the same time), the company or trust may meet that requirement by making one payment or by making separate payments. (7) If a * CGT concession stakeholder is under 55 just before a payment is made under this section in relation to him or her: (a) the company or trust must make the payment to the CGT concession stakeholder by contributing it for the stakeholder to a * complying superannuation fund or an * RSA in respect of the stakeholder; and (b) the company or trust must notify the trustee of the fund or the * RSA provider at the time the contribution is made that the contribution is made in accordance with this section. Note: For the non ‑ deductibility of the contribution, see subsection 290 ‑ 150(4). (8) For the purposes of Part 3 ‑ 30, treat a payment mentioned in paragraph (7)(a), made in accordance with this section, as a contribution made by the * CGT concession stakeholder. Payments are not dividends or frankable distributions (9) Subsection (10) applies if: (a) a company makes a payment to comply with subsection (1) to: (i) a * CGT concession stakeholder; or (ii) an interposed entity, in relation to a CGT concession stakeholder; or (b) both of the following apply: (i) an interposed entity receives a payment (whether directly or indirectly through one or more interposed entities) that a company or trust makes to comply with subsection (1), in relation to a CGT concession stakeholder; (ii) the interposed entity passes on the payment to the CGT concession stakeholder or another interposed entity. (10) This Act applies to the payment, to the extent that it is less than or equal to the amount mentioned in subsection (3) for the stakeholder, as if: (a) it were not a * dividend; and (b) it were not a * frankable distribution. (11) Subsection (10) applies in relation to the payment despite section 109 and Division 7A of Part III of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 173 of 2000, effective s 4, Sch 1, Sch 3 (items 1–15, 17), Sch 4 (items 6–45, 47–49, 51–59, 65(1), (3)) and Sch 6: 21 Dec 2000 (s 2(1)) Sch 4 (items 46, 50): 1 July 1998 (s 2(3)) Sch 5: 31 May 2000 (s 2(4)) | Amended by No 101 of 2004, effective s. 4, Schedule 1 (items 2–4), Schedule 9, Schedule 10 (items 7–37) and Schedule 11 (items 144–146): Royal Assent Sch 2 and Sch 7 (items 1–8): 30 June 2003 (s 2(1) items 3, 8) Sch 3: 1 July 2003 (s 2(1) item 4) Sch 11 (item 35): 30 June 2000 (s 2(1) item 13) Sch 11 (items 52–59, 88, 89): 1 July 2000 (s 2(1) item 14) Sch 11 (items 141–143): 1 July 2001 (s 2(1) item 16) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 15 of 2007, effective s 4, Sch 1 (items 150–236, 240, 242–260, 406(1)–(3)), Sch 3 (items 8–44, 66) and Sch 4 (items 1–8): 15 Mar 2007 (s 2(1) items 1, 2, 6, 8, 9) Sch 2: 12 Apr 2007 (s 2(1) item 3) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007 | Amended by No 42 of 2009, effective Schedule 1 (items 17–26), Schedule 2 (items 2–16, 19–39, 41–48), Schedule 4 (items 2–12), Schedule 5 (items 1–12, 15) and Schedule 8 (items 1, 2, 5): Royal Assent Sch 2 (item 1): 21 June 2007 (s 2(1) item 3) Schedule 3: 1 July 2009 Schedule 8 (items 3, 4): 1 July 2011 | Amended by No 10 of 2016, effective Sch 1 (items 1–32, 38, 39) and Sch 2 (items 3–9, 30): 26 Feb 2016 (s 2(1) items 2, 4)

s 152-330 — 15 ‑ year rule has priority

This Subdivision does not apply to a * capital gain to which Subdivision 152 ‑ B (15 ‑ year exemption) applies. Note: Under that Subdivision, such a gain is entirely disregarded, so there is no need for any further concession to apply.

Amendment history: Inserted by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 152-400 — What this Subdivision is about

A small business roll ‑ over allows you to defer the making of a capital gain from a CGT event happening in relation to one or more small business assets if the basic conditions in Subdivision 152 ‑ A are satisfied for the gain. You may choose not to apply the concession in section 152 ‑ 205 (small business 50% reduction) before this one. For an additional exemption, see also Subdivision 152 ‑ D (small business retirement exemption). Table of sections Operative provisions 152 ‑ 410 When you can obtain the roll ‑ over 152 ‑ 415 What the roll ‑ over consists of 152 ‑ 420 Rules where an individual who has obtained a roll ‑ over dies 152 ‑ 430 15 ‑ year rule has priority

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 55 of 2007, effective 12 Apr 2007

s 152-410 — When you can obtain the roll ‑ over

You can choose to obtain a roll ‑ over under this Subdivision for a * capital gain if the basic conditions in Subdivision 152 ‑ A are satisfied for the gain. Note 1: You can choose the roll ‑ over even if you have not yet acquired a replacement asset or incurred fourth element expenditure, but: (a) CGT event J5 happens if, by the end of the replacement asset period, you do not acquire the asset or incur the expenditure (see section 104 ‑ 197); and (b) CGT event J6 happens if, by the end of the replacement asset period, the cost of the replacement asset or the amount of fourth element expenditure incurred (or both) is less than the amount of the capital gain that you disregarded (see section 104 ‑ 198). Note 2: If you have acquired a replacement asset or incurred fourth element expenditure but there is a change in relation to the replacement asset or improved asset after the end of the replacement asset period, CGT event J2 may happen: see section 104 ‑ 185.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-415 — What the roll ‑ over consists of

If you choose the roll ‑ over, you can choose to disregard all or part of each * capital gain to which this Subdivision applies. Note: If you choose to disregard only some of the capital gain, you make a capital gain equal to the remaining amount. Example: The original capital gain was $100,000. You have reduced it to $25,000 under other concessions (apart from the roll ‑ over). If you choose to disregard $20,000, you are left with a final capital gain of $5,000.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-420 — Rules where an individual who has obtained a roll ‑ over dies

(1) This section applies if: (a) a replacement asset, or an asset in relation to which * fourth element expenditure has been incurred, formed part of the estate of an individual who has died; and (b) either or both of the following apply: (i) the asset has devolved to the deceased’s * legal personal representative; (ii) the asset has * passed to a beneficiary of the deceased; and (c) a change covered by subsection 104 ‑ 185(2) or (3) did not happen while the deceased owned it or, if the asset has passed to a beneficiary, while the asset was in the hands of the deceased’s legal personal representative. (2) For the purposes of this Subdivision, anything done or not done by the deceased in relation to the asset is treated as though it had been done or not done by the * legal personal representative. (3) For the purposes of this Subdivision, if the asset has * passed to a beneficiary, anything done or not done by the deceased or by the deceased’s * legal personal representative (including because of the operation of subsection (2)) in relation to the asset is treated as though it had been done or not done by the beneficiary.

Amendment history: Inserted by No 165 of 1999, effective s 4, Sch 1 (items 1–53, 61, 62), Sch 2, Sch 3 (items 1–4, 18) and Sch 4: 10 Dec 1999 (s 2(1), (2)) | Repealed and substituted by No 55 of 2007, effective 12 Apr 2007

s 152-430 — 15 ‑ year rule has priority

This Subdivision does not apply to a * capital gain to which Subdivision 152 ‑ B (15 ‑ year exemption) applies. Note: Under that Subdivision, such a gain is entirely disregarded, so there is no need for any further concession to apply.

Amendment history: Inserted by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 160-1 — What this Division is about

A corporate tax entity can choose to “carry back” a tax loss it had for 2019 ‑ 20, 2020 ‑ 21, 2021 ‑ 22 or 2022 ‑ 23 against the income tax liability it had for 2018 ‑ 19, 2019 ‑ 20, 2020 ‑ 21 or 2021 ‑ 22. The entity gets a refundable tax offset for 2020 ‑ 21, 2021 ‑ 22 or 2022 ‑ 23 that is a proxy for the tax the entity would save if it deducted the loss in the income year to which the loss is “carried back”. The refundable tax offset: (a) is capped at the entity’s franking account balance; and (b) is only available for losses for years for which the entity’s turnover was less than $5 billion.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 160-5 — Entitlement to loss carry back tax offset

An entity is entitled to a * tax offset (the loss carry back tax offset ) for the * current year if the following conditions are satisfied: (a) the current year is: (i) the 2020 ‑ 21 income year; or (ii) the 2021 ‑ 22 income year; or (iii) the 2022 ‑ 23 income year; (b) the entity is a * corporate tax entity throughout the current year; Note: See also section 160 ‑ 25. (c) any or all of the following income years were * loss years: (i) the 2019 ‑ 20 income year; (ii) the 2020 ‑ 21 income year; (iii) if the current year is the 2021 ‑ 22 income year—the 2021 ‑ 22 income year; (iv) if the current year is the 2022 ‑ 23 income year—the 2022 ‑ 23 income year or the 2021 ‑ 22 income year; (d) the entity had an * income tax liability for any or all of the following income years: (i) the 2018 ‑ 19 income year; (ii) the 2019 ‑ 20 income year; (iii) if the current year is the 2021 ‑ 22 income year and the 2021 ‑ 22 income year was a loss year—the 2020 ‑ 21 income year; (iv) if the current year is the 2022 ‑ 23 income year and the 2022 ‑ 23 income year was a loss year—the 2021 ‑ 22 income year or the 2020 ‑ 21 income year; (v) if the current year is the 2022 ‑ 23 income year and the 2021 ‑ 22 income year was a loss year—the 2020 ‑ 21 income year; (e) any of the following requirements are satisfied for the current year and each of the 5 income years before the current year: (i) the entity has lodged its * income tax return for the year; (ii) the entity was not required to lodge an income tax return for the year; (iii) the Commissioner has made an assessment of the entity’s income tax for the year; (f) the entity makes a * loss carry back choice for the current year in accordance with Subdivision 160 ‑ B. Note 1: The entity can be entitled to only one loss carry back tax offset for 2020 ‑ 21. However, that offset has 2 components: one relating to 2018 ‑ 19 and one relating to 2019 ‑ 20: see section 160 ‑ 10. Note 2: The entity can be entitled to only one loss carry back tax offset for 2021 ‑ 22. However, that offset has 3 components: one relating to 2018 ‑ 19, one relating to 2019 ‑ 20 and one relating to 2020 ‑ 21: see section 160 ‑ 10. Note 2A: The entity can be entitled to only one loss carry back tax offset for 2022 ‑ 23. However, that offset has 4 components: one relating to 2018 ‑ 19, one relating to 2019 ‑ 20, one relating to 2020 ‑ 21 and one relating to 2021 ‑ 22: see section 160 ‑ 10. Note 3: The loss carry back tax offset is a refundable tax offset: see section 67 ‑ 23.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 160-10 — Amount of loss carry back tax offset

(1) The amount of the entity’s * loss carry back tax offset for the * current year is the lesser of the following amounts: (a) the sum of the * loss carry back tax offset components for: (i) the 2018 ‑ 19 income year; and (ii) the 2019 ‑ 20 income year; and (iii) if the current year is the 2021 ‑ 22 income year—the 2020 ‑ 21 income year; and (iv) if the current year is the 2022 ‑ 23 income year—the 2021 ‑ 22 income year and the 2020 ‑ 21 income year; (b) the entity’s * franking account balance at the end of the current year. Meaning of loss carry back tax offset component (2) For the purposes of working out the amount of the entity’s * loss carry back tax offset for the * current year, the entity’s loss carry back tax offset component for an income year is: (a) if the entity does not, in its * loss carry back choice for the current year, * carry back any * tax losses to the income year—nil; or (b) otherwise—so much of the entity’s * income tax liability for the income year as does not exceed: (i) if, in its loss carry back choice for the current year, the entity carries back only one tax loss to the income year—the amount worked out at step 3 of the following method statement in relation to the tax loss; or (ii) if, in its loss carry back choice for the current year, the entity carries back tax losses for 2, 3 or 4 * loss years to the income year—the sum of the amounts worked out at step 3 of the following method statement in relation to each of those tax losses. Method statement Step 1. Start with the amount of the * tax loss the entity * carries back to the income year. Step 2. Reduce the step 1 amount by the entity’s * net exempt income for the income year. Note: Do not reduce the step 1 amount by the entity’s net exempt income to the extent the net exempt income has already been utilised: see section 960 ‑ 20. Step 3. Multiply the step 2 amount by the * corporate tax rate for the * loss year. Example: Company A (which is not a base rate entity) has at the end of the 2020 ‑ 21 income year: (a) a tax loss of $900,000 for that year and a franking account balance of $280,000; and (b) for the 2018 ‑ 19 income year—an income tax liability of $120,000 and net exempt income of $5,000; and (c) for the 2019 ‑ 20 income year—an income tax liability of $210,000. Company A chooses to carry back $405,000 of its tax loss for the 2020 ‑ 21 year to the 2018 ‑ 19 year and $495,000 of that loss to the 2019 ‑ 20 year. Company A’s loss carry back tax offset for the 2020 ‑ 21 year is $268,500, worked out as follows: (a) an offset component for the 2018 ‑ 19 income year of $120,000, calculated by starting with the $405,000 carried back, reducing that at step 2 by $5,000, and multiplying the result by 30%; (b) an offset component for the 2019 ‑ 20 income year of $148,500, calculated by starting with the $495,000 carried back and multiplying the result by 30%. The sum of the 2 components is $268,500 (which is less than Company A’s $280,000 franking account balance at the end of the 2020 ‑ 21 year). If that sum had exceeded that balance, the amount of the offset would have been limited under paragraph (1)(b) of this section to that balance. Income tax liability for the 2018 ‑ 19 or 2019 ‑ 20 income year already utilised—entitlement to loss carry back tax offset for 2021 ‑ 22 income year (3) Subsection (4) applies in relation to applying paragraph (2)(b) to work out the entity’s * loss carry back tax offset component for the 2018 ‑ 19 or 2019 ‑ 20 income year (the gain year ) as part of working out the entity’s entitlement to a * loss carry back tax offset for the 2021 ‑ 22 income year. (4) Disregard so much of the entity’s * income tax liability for the gain year as has previously been included (as part of working out the entity’s entitlement to a * loss carry back tax offset for the 2020 ‑ 21 income year) in a * loss carry back tax offset component. Income tax liability for the 2018 ‑ 19, 2019 ‑ 20 or 2020 ‑ 21 income year already utilised — entitlement to loss carry back tax offset for 2022 ‑ 23 income year (4A) Subsection (4B) applies in relation to applying paragraph (2)(b) to work out the entity’s * loss carry back tax offset component for the 2018 ‑ 19, 2019 ‑ 20 or 2020 ‑ 21 income year (the gain year ) as part of working out the entity’s entitlement to a * loss carry back tax offset for the 2022 ‑ 23 income year. (4B) Disregard so much of the entity’s * income tax liability for the gain year as has previously been included (as part of working out the entity’s entitlement to a * loss carry back tax offset for the 2020 ‑ 21 or 2021 ‑ 22 income year) in a * loss carry back tax offset component. Foreign residents (5) Paragraph (1)(b) does not apply if the entity was a foreign resident (other than an * NZ franking company) for: (a) if the entity * carries back an amount to the 2018 ‑ 19 income year—more than half of the 2018 ‑ 19 income year; and (b) if the entity carries back an amount to the 2019 ‑ 20 income year—more than half of the 2019 ‑ 20 income year; and (c) if the * current year is the 2021 ‑ 22 income year and the entity carries back an amount to the 2020 ‑ 21 income year—more than half of the 2020 ‑ 21 income year; and (d) if the current year is the 2022 ‑ 23 income year: (i) where the entity carries back an amount to the 2021 ‑ 22 income year—more than half of the 2021 ‑ 22 income year; and (ii) where the entity carries back an amount to the 2020 ‑ 21 income year—more than half of the 2020 ‑ 21 income year.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 160-15 — Loss carry back choice

(1) If the * current year is the 2020 ‑ 21, 2021 ‑ 22 or 2022 ‑ 23 income year, the entity may make a loss carry back choice for the current year that specifies the following: (a) if the current year is the 2021 ‑ 22 income year: (i) how much (expressed as a specified amount) of the entity’s * tax loss (if any) for the 2021 ‑ 22 income year is to be * carried back to the 2020 ‑ 21 income year; and (ii) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2021 ‑ 22 income year is to be carried back to the 2019 ‑ 20 income year; and (iii) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2021 ‑ 22 income year is to be carried back to the 2018 ‑ 19 income year; (aa) if the current year is the 2022 ‑ 23 income year and the 2022 ‑ 23 income year was a loss year: (i) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2022 ‑ 23 income year is to be carried back to the 2021 ‑ 22 income year; and (ii) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2022 ‑ 23 income year is to be carried back to the 2020 ‑ 21 income year; and (iii) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2022 ‑ 23 income year is to be carried back to the 2019 ‑ 20 income year; and (iv) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2022 ‑ 23 income year is to be carried back to the 2018 ‑ 19 income year; (ab) if the current year is the 2022 ‑ 23 income year and the 2021 ‑ 22 income year was a loss year: (i) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2021 ‑ 22 income year is to be carried back to the 2020 ‑ 21 income year; and (ii) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2021 ‑ 22 income year is to be carried back to the 2019 ‑ 20 income year; and (iii) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2021 ‑ 22 income year is to be carried back to the 2018 ‑ 19 income year; (b) in any case: (i) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2020 ‑ 21 income year is to be carried back to the 2019 ‑ 20 income year; and (i) how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2020 ‑ 21 income year is to be carried back to the 2018 ‑ 19 income year; (c) in any case—how much (expressed as a specified amount) of the entity’s tax loss (if any) for the 2019 ‑ 20 income year is to be carried back to the 2018 ‑ 19 income year. (2) The choice under subsection (1) must be made in the * approved form by: (a) the day the entity lodges its * income tax return for the * current year; or (b) such later day as the Commissioner allows.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 141 of 2020, effective Sch 1 (item 1) and Sch 4 (items 82–101): 1 Jan 2021 (s 2(1) items 2, 7) Sch 4 (item 146): 18 Dec 2020 (s 2(1) item 16) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 160-16 — Changing a loss carry back choice

(1) An entity may change a * loss carry back choice for the 2020 ‑ 21, 2021 ‑ 22 or 2022 ‑ 23 income year by notice, in the * approved form, given to the Commissioner. (2) The notice to change a * loss carry back choice for an income year must be given to the Commissioner within the limited amendment period (within the meaning of section 170 of the Income Tax Assessment Act 1936 ) for an assessment for that income year. (3) To avoid doubt, the change takes effect from the day the entity made the original * loss carry back choice under section 160 ‑ 15.

Amendment history: Inserted by No 127 of 2021, effective Sch 1 and Sch 3 (items 42, 49–63, 65–69, 71, 72): 1 Jan 2022 (s 2(1) items 2, 5) Sch 2 (item 56) and Sch 3 (items 3–5, 33–35): 8 Dec 2021 (s 2(1) items 3, 4) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 160-20 — Entity must have had turnover less than $5 billion for loss year

The entity cannot * carry back an amount of a * tax loss for an income year unless the entity: (a) was a * small business entity for the income year; or (b) would have been a small business entity for the income year if: (i) each reference in Subdivision 328 ‑ C (about what is a small business entity) to $10 million were instead a reference to $5 billion; and (ii) the reference in paragraph 328 ‑ 110(5)(b) to a small business entity were instead a reference to an entity covered by this section.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7)

s 160-25 — Entity must have been a corporate tax entity during relevant years

(1) If the * current year is the 2020 ‑ 21 income year: (a) the entity cannot * carry back an amount of a * tax loss to the 2018 ‑ 19 income year unless the entity was a * corporate tax entity throughout: (i) the 2018 ‑ 19 income year (disregarding any period when the entity was not in existence); and (ii) the 2019 ‑ 20 income year; and (b) the entity cannot carry back an amount of a tax loss to the 2019 ‑ 20 income year unless the entity was a corporate tax entity throughout the 2019 ‑ 20 income year (disregarding any period when the entity was not in existence). Note: The entity must be a corporate tax entity throughout 2020 ‑ 21: see paragraph 160 ‑ 5(b). (2) If the * current year is the 2021 ‑ 22 income year: (a) the entity cannot * carry back an amount of a * tax loss to the 2018 ‑ 19 income year unless the entity was a * corporate tax entity throughout: (i) the 2018 ‑ 19 income year (disregarding any period when the entity was not in existence); and (ii) the 2019 ‑ 20 income year; and (iii) the 2020 ‑ 21 income year; and (b) the entity cannot carry back an amount of a tax loss to the 2019 ‑ 20 income year unless the entity was a corporate tax entity throughout: (i) the 2019 ‑ 20 income year (disregarding any period when the entity was not in existence); and (ii) the 2020 ‑ 21 income year; and (c) the entity cannot carry back an amount of a tax loss to the 2020 ‑ 21 income year unless the entity was a corporate tax entity throughout the 2020 ‑ 21 income year (disregarding any period when the entity was not in existence). Note: The entity must be a corporate tax entity throughout 2021 ‑ 22: see paragraph 160 ‑ 5(b). (3) If the * current year is the 2022 ‑ 23 income year: (a) the entity cannot * carry back an amount of a * tax loss to the 2018 ‑ 19 income year unless the entity was a * corporate tax entity throughout: (i) the 2018 ‑ 19 income year (disregarding any period when the entity was not in existence); and (ii) the 2019 ‑ 20 income year; and (iii) the 2020 ‑ 21 income year; and (iv) the 2021 ‑ 22 income year; and (b) the entity cannot carry back an amount of a tax loss to the 2019 ‑ 20 income year unless the entity was a corporate tax entity throughout: (i) the 2019 ‑ 20 income year (disregarding any period when the entity was not in existence); and (ii) the 2020 ‑ 21 income year; and (iii) the 2021 ‑ 22 income year; and (c) the entity cannot carry back an amount of a tax loss to the 2020 ‑ 21 income year unless the entity was a corporate tax entity throughout: (i) the 2020 ‑ 21 income year (disregarding any period when the entity was not in existence); and (ii) the 2021 ‑ 22 income year; and (d) the entity cannot carry back an amount of a tax loss to the 2021 ‑ 22 income year unless the entity was a corporate tax entity throughout the 2021 ‑ 22 income year (disregarding any period when the entity was not in existence). Note: The entity must be a corporate tax entity throughout 2022 ‑ 23: see paragraph 160 ‑ 5(b).

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 160-30 — Transferred tax losses, income tax liabilities etc. not included

(1) The entity cannot * carry back an amount of a * tax loss for an income year, to the extent that the loss: (a) was transferred to or from the entity under Division 170 or Subdivision 707 ‑ A (about certain company groups); or (b) exceeds the amount that would be the entity’s tax loss for the year if section 36 ‑ 55 (about excess franking offsets) were disregarded. (2) For the purposes of this Division, disregard the * income tax liability of the entity for an income year to the extent that it consists of an income tax liability of a * subsidiary member of a * consolidated group or * MEC group that is taken to be an income tax liability of the entity because of section 701 ‑ 5 (the entry history rule).

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7)

s 160-35 — Integrity rule—no loss carry back tax offset if scheme entered into

No loss carry back tax offset if scheme entered into (1) The * corporate tax entity cannot * carry back an amount of a * tax loss to an income year (the gain year ) if: (a) there is a * scheme for a disposition of * membership interests, or an * interest in membership interests, in: (i) the corporate tax entity; or (ii) an entity that has a direct or indirect interest in the corporate tax entity; and (b) the scheme is entered into or carried out during the period: (i) starting at the start of the gain year; and (ii) ending at the end of the * current year; and (c) the disposition results in a change in who controls, or is able to control, (whether directly, or indirectly through one or more interposed entities) the voting power in the corporate tax entity; and (d) another entity receives, in connection with the scheme, a * financial benefit calculated by reference to one or more * loss carry back tax offsets to which it was reasonable, at the time the scheme was entered into or carried out, to expect the corporate tax entity would be entitled; and (e) having regard to the relevant circumstances of the scheme, it would be concluded that a person, or one of the persons, who entered into or carried out the scheme or any part of the scheme did so for a purpose (whether or not the dominant purpose but not including an incidental purpose) of enabling the corporate tax entity to get a loss carry back tax offset. Relevant circumstances (2) For the purposes of paragraph (1)(e), the relevant circumstances of the * scheme for a disposition include the following: (a) the extent to which the * corporate tax entity continued to conduct the same activities after the scheme as it did before the scheme; (b) if the corporate tax entity continued to use the same assets after the scheme as it did before the scheme—the extent to which those assets were assets for which equivalents were not readily available at the time of the scheme; (c) the matters referred to in subsection 177D(2) of the Income Tax Assessment Act 1936 (applying paragraph 177D(2)(d) as if the reference in that paragraph to Part IVA of that Act were instead a reference to this section). Application of this section to non ‑ share equity interests (3) This section: (a) applies to a * non ‑ share equity interest in the same way as it applies to a * membership interest; and (b) applies to an * equity holder in the same way as it applies to a * member.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7)

s 164-1 — What this Division is about

A company that issues non ‑ share equity interests will have a notional account called a non ‑ share capital account . This account records contributions to the company in relation to those non ‑ share equity interests and returns made by the company of those contributions. A non ‑ share distribution that represents a return of contributions is not taxed as a dividend (subject to the anti ‑ avoidance provisions dealing with dividend substitution). In certain circumstances a company may use its share capital account as the source for such distributions. Table of sections Operative provisions 164 ‑ 5 Object 164 ‑ 10 Non ‑ share capital account 164 ‑ 15 Credits to non ‑ share capital account 164 ‑ 20 Debits to non ‑ share capital account

Amendment history: Inserted by No 163 of 2001, effective 1 July 2001

s 164-5 — Object

(1) This Division provides for the * non ‑ share capital account through which a company records contributions made to it in respect of * non ‑ share equity interests and returns by it of those contributions. (2) This allows a * non ‑ share distribution to be characterised as either: (a) a * non ‑ share dividend; or (b) a * non ‑ share capital return.

Amendment history: Inserted by No 163 of 2001, effective 1 July 2001

s 164-10 — Non ‑ share capital account

(1) A company has a non ‑ share capital account if: (a) the company issues a * non ‑ share equity interest in the company on or after 1 July 2001; or (b) the company has issued a non ‑ share equity interest in the company before 1 July 2001 that is still in existence on 1 July 2001; or (c) a * debt interest in the company changes at a particular time (the change time ) to an * equity interest in the company because of subsection 974 ‑ 110(1) or (2); or (d) the following conditions are satisfied in relation to an interest in the company: (i) immediately before subsection 974 ‑ 75(4) ceases to have effect, the interest is taken to be a debt interest in the company because of that subsection; (ii) the interest is an equity interest in the company at the time (the change time ) that is immediately after that cessation; (iii) subsection 974 ‑ 75(6) does not apply to the interest in relation to the income year that includes the change time; or (e) the following conditions are satisfied in relation to an interest in the company: (i) subsection 974 ‑ 75(6) applies to the interest in relation to a particular income year; (ii) that subsection does not apply to the interest in relation to the next income year; (iii) the interest is an equity interest in the company at the time (the change time ) that is the start of that next income year. (2) The account continues in existence even if the company ceases to have any * non ‑ share equity interests on issue. (3) The balance of the account cannot fall below nil. (4) The only credits and debits that may be made to the account are those provided for in sections 164 ‑ 15 and 164 ‑ 20.

Amendment history: Inserted by No 163 of 2001, effective 1 July 2001 | Amended by No 162 of 2005, effective Schedule 2 (items 1–13), Schedule 3 (items 1–3, 16–19, 33) and Schedule 6 (items 28–32): Royal Assent Schedule 6 (items 1–5, 7–13): 1 July 2005 Sch 6 (items 6, 16–25): 1 July 2001 (s 2(1) items 4, 6)