Income Tax Assessment Act 1997

s 109-60 — Acquisition rules outside this Part and Part 3 ‑ 3

This table sets out other acquisition rules outside this Part and Part 3 ‑ 3. Provisions of the Income Tax Assessment Act 1936 are in bold . Other acquisition rules Item In these circumstances: The asset is acquired at this time: See: 1 CGT event happens to Cocos (Keeling) Islands asset 30 June 1991 subsection 102 ‑ 25(1) of the Income Tax (Transitional Provisions) Act 1997 2 Lender acquires a replacement security before 20 September 1985 subsection 26BC(6A) 3 Trust ceases to be a resident trust for CGT purposes and there is an attributable taxpayer when it ceases section 102AAZBA 4 CGT event happens to CGT asset in connection with the demutualisation of an insurance company except a friendly society health or life insurer on the demutualisation resolution day section 121AS 5 CGT event happens to assets of NSW State Bank at the first taxing time section 121EN 6 You own shares in a company that stops being a PDF just after it stops section 124ZR 8 A CGT asset of a CFC (that it owned on its commencing day) on the CFC’s commencing day section 411 9 A CGT asset is owned by a tax exempt entity and it becomes taxable at the transition time section 57 ‑ 25 in Schedule 2D 10 CGT event happens to CGT asset in connection with the demutualisation of a mutual entity other than an insurance company, health insurer and friendly society health or life insurer on the demutualisation resolution day Division 326 in Schedule 2H 11 You stop holding an item as trading stock when you stop paragraph 70 ‑ 110(1)(b) 11A You acquire an * ESS interest and Subdivision 83A ‑ C (about employee share schemes) applies to the interest at the * ESS deferred taxing point for the interest section 83A ‑ 125 12 CGT event happens to 30 June 1988 asset of a complying superannuation entity 30 June 1988 section 295 ‑ 90 13 You are issued with a share or right under a demutualisation of a health insurer except a friendly society health or life insurer the time the share or right is issued sections 315 ‑ 80, 315 ‑ 210 and 315 ‑ 260 14 You are transferred a share or right by a lost policy holders trust under a demutualisation of a health insurer except a friendly society health or life insurer the time the share or right is issued sections 315 ‑ 145, 315 ‑ 210 and 315 ‑ 260 14A You are issued with a share, or a right to acquire shares, under a demutualisation of a friendly society health or life insurer the time the share or right is issued section 316 ‑ 105 14B You are transferred a share, or right to acquire shares, by a lost policy holders trust under a demutualisation of a friendly society health or life insurer the time the share or right is issued to the trustee section 316 ‑ 170 15 A CGT asset is transferred to or from a life insurance company’s complying superannuation asset pool at the time of the transfer Division 320 16 A CGT asset is transferred to or from the segregated exempt assets of a life insurance company at the time of the transfer Division 320 17 Entity becomes a subsidiary member of a consolidated group at the time it becomes a subsidiary member 701 ‑ 5 18 Entity ceases to be a subsidiary member of a consolidated group at the time it ceases 701 ‑ 40

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 103 of 1999, effective 16 July 1999 | 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 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 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 45 of 2008, effective 26 June 2008 | 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 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 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 | Amended by No 132 of 2011, effective Sch 2 (items 4–71): 2 Apr 2012 (s 2(1) item 5) Sch 2 (items 74–77): never commenced (s 2(1) item 6 (rep by 83, 2014, Sch 3 item 1)) | Amended by No 53 of 2015, effective Sch 1 (items 9–17, 19): 1 July 2016 (s 2) | Amended by No 70 of 2015, effective Sch 1 (items 65–108, 188–192, 195–205): 1 July 2015 (s 2(1) items 3, 4, 6) Sch 2 (items 17, 24–29, 34–39), Sch 6 (items 13–30, 32–38) and Sch 7 (items 1, 5–11): 25 June 2015 (s 2(1) items 7, 11, 13, 20) Sch 4 (items 1, 2) and Sch 5 (item 1): 26 June 2015 (s 2(1) items 7A, 8) Sch 4 (items 3, 4): 1 July 2025 (s 2(1) item 7B) Sch 6 (item 31): 29 June 2013 (s 2(1) item 12) The commencement date for amendments made by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 Sch 4 (items 1, 2) was retrospectively changed from 25 June 2015 to 26 June 2015 | Amended by No 20 of 2016, effective Sch 1 (items 1, 2): 1 July 2016 (s 2(1) item 2) | Amended by No 23 of 2018, effective Sch 1 (items 12–19, 21–23, 60–62), Sch 2 (items 1, 2, 6) and Sch 5 (items 7–11, 26–28): 1 Apr 2018 (s 2(1) items 3, 5, 8, 10, 12) Sch 1 (items 75–79): 30 Mar 2018 (s 2(1) item 9) | Amended by No 64 of 2020, effective Sch 3 (items 72–122): 1 July 2020 (s 2(1) item 5) Sch 3 (items 228–239, 325, 326): 1 Oct 2020 (s 2(1) item 6) Sch 3 (items 327–330): 1 July 2017 (s 2(1) item 7)

s 110-1 — What this Division is about

This Division tells you how to work out the cost base and reduced cost base of a CGT asset. You need to know these to work out if you make a capital gain or loss from most CGT events. Table of sections 110 ‑ 5 Modifications to general rules 110 ‑ 10 Rules about cost base not relevant for some CGT events

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 110-5 — Modifications to general rules

After you have read the general rules, you need to know if there are any modifications to them. Division 112 lists each situation that may result in a modification and tells you where you can find the detailed provisions for each situation.

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 110-10 — Rules about cost base not relevant for some CGT events

This table sets out each CGT event for which you do not need to know what the cost base or reduced cost base of a CGT asset is to work out if you make a capital gain or loss. The section describing the event tells you what amount is relevant instead. Rules about cost base not relevant for some CGT events Event number Description of event: See section: C3 End of option to acquire shares etc. 104 ‑ 30 D1 Creating contractual or other rights 104 ‑ 35 D2 Granting an option 104 ‑ 40 D3 Granting a right to income from mining 104 ‑ 45 E9 Creating a trust over future property 104 ‑ 105 F1 Granting a lease 104 ‑ 110 F3 Lessor pays lessee to get lease changed 104 ‑ 120 F5 Lessor receives payment for changing lease 104 ‑ 130 H1 Forfeiture of deposit 104 ‑ 150 H2 Receipt for event relating to a CGT asset 104 ‑ 155 J5 Failure to acquire replacement asset and to incur fourth element expenditure after a roll ‑ over 104 ‑ 197 J6 Cost of acquisition of replacement asset or amount of fourth element expenditure, or both, not sufficient to cover disregarded capital gain 104 ‑ 198 K2 Bankrupt pays amount in relation to debt 104 ‑ 210 K7 Balancing adjustment event happens to depreciating asset 104 ‑ 235 K9 Carried interests 104 ‑ 255 K10 You make a forex realisation gain covered by item 1 of the table in subsection 775 ‑ 70(1) 104 ‑ 260 K11 You make a forex realisation loss covered by item 1 of the table in subsection 775 ‑ 75(1) 104 ‑ 265 K12 Foreign hybrid loss exposure adjustment 104 ‑ 270 L1 Reduction under section 705 ‑ 57 in tax cost setting amount of assets of entity becoming subsidiary member of consolidated group or MEC group 104 ‑ 500 L2 Amount remaining after step 3A etc. of joining allocable cost amount is negative 104 ‑ 505 L3 Tax cost setting amounts for retained cost base assets exceed joining allocable cost amount 104 ‑ 510 L4 No reset cost base assets against which to apply excess of net allocable cost amount on joining 104 ‑ 515 L5 Amount remaining after step 4 of leaving allocable cost amount is negative 104 ‑ 520 L6 Errors in tax cost setting amounts for entity joining consolidated group or MEC group 104 ‑ 525 L8 Reduction in tax cost setting amount for reset cost base assets on joining cannot be allocated 104 ‑ 535

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 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 16 of 2003, effective s 4: 11 Apr 2003 (s 2(1) item 1) Sch 1 (items 1–6, 9–26), Sch 2, 3, Sch 4 (items 1–7), Sch 5 (items 2–5), Sch 6 (items 1–9), Sch 7 (items 1, 2, 4–29), Sch 8, Sch 9 (items 1, 2, 13–21), Sch 10 (item 2), Sch 11 (items 1–3), Sch 12, 13, Sch 14 (items 1–7), Sch 16 (items 1–3), Sch 19 (items 1–3), Sch 21, 22, Sch 23 (items 10–13) and Sch 24 (items 20–23): 24 Oct 2002 (s 2(1) items 1A, 2–11, 13, 14) Sch 7 (item 3): ( see Sch 10 (item 224) of Act No. 41, 2005) Sch 25 (items 1–10), Sch 26 (items 1–4, 8), Sch 27 (items 1–19, 21), Sch 28 (items 1–12, 19), Sch 29 (items 12, 13) and Sch 30 (items 1, 2): 29 June 2002 (s 2(1) items 15–19, 21, 23) | Amended by No 107 of 2003, effective Sch 6: 1 July 2003 (s 2(1) item 3) Sch 7 (items 6–8): 30 June 2003 (s 2(1) item 5) Sch 7 (item 15): 17 Dec 2003 (s 2(1) item 7) Remainder: 21 Oct 2003 (s 2(1) items 1, 2, 4, 6, 8) | Amended by No 133 of 2003, effective 17 Dec 2003 | 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 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 110-25 — General rules about cost base

(1) The cost base of a * CGT asset consists of 5 elements. Note 1: You need to keep records of each element: see Division 121. Note 2: The cost base is reduced by net input tax credits: see section 103 ‑ 30. Note 3: An amount that makes up all or part of an element of the cost base of an asset may be determined under section 230 ‑ 505, if the amount is provided for acquiring a thing, and you start or cease to have a Division 230 financial arrangement as consideration for the acquisition of the thing. 5 elements of the cost base (2) The first element is the total of: (a) the money you paid, or are required to pay, in respect of * acquiring it; and (b) the * market value of any other property you gave, or are required to give, in respect of acquiring it (worked out as at the time of the acquisition). Note 1: There are special rules for working out when you are required to pay money or give other property: see section 103 ‑ 15. Note 2: This element is replaced with another amount in many situations: see Division 112. (3) The second element is the * incidental costs you incurred. These costs can include giving property: see section 103 ‑ 5. Note: There is one situation to do with options in which the incidental costs relating to the CGT event are modified: see section 112 ‑ 85. (4) The third element is the costs of owning the * CGT asset you incurred (but only if you * acquired the asset after 20 August 1991). These costs include: (a) interest on money you borrowed to acquire the asset; and (b) costs of maintaining, repairing or insuring it; and (c) rates or land tax, if the asset is land; and (d) interest on money you borrowed to refinance the money you borrowed to acquire the asset; and (e) interest on money you borrowed to finance the capital expenditure you incurred to increase the asset’s value. These costs can include giving property: see section 103 ‑ 5. Note: This element does not apply to personal use assets or collectables: see sections 108 ‑ 17 and 108 ‑ 30. (5) The fourth element is capital expenditure you incurred: (a) the purpose or the expected effect of which is to increase or preserve the asset’s value; or (b) that relates to installing or moving the asset. The expenditure can include giving property: see section 103 ‑ 5. Note: There are 3 situations involving leases in which this element is modified: see section 112 ‑ 80. (5A) Subsection (5) does not apply to capital expenditure incurred in relation to goodwill. (6) The fifth element is capital expenditure that you incurred to establish, preserve or defend your title to the asset, or a right over the asset. (The expenditure can include giving property: see section 103 ‑ 5.) Assume a CGT event for purposes of working out cost base at a particular time (12) If: (a) it is necessary to work out the * cost base at a particular time; and (b) a * CGT event does not happen in relation to the asset at or just after that time; assume, for the purpose only of working out the cost base at the particular time, that such an event does happen in relation to the asset at or just after that time. Note 1: For example, in order to apply subsection 110 ‑ 37(1), it is necessary for there to be a CGT event. Note 2: The assumption that a CGT event happens does not have any consequence beyond that stated. For example, it does not mean that the asset is afterwards to be treated as having been acquired at the particular time with a first element of cost base equal to all of its former cost base elements.

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 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | Amended by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | 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 169 of 2001, effective s 4, Sch 4, Sch 5 (items 1–9) and Sch 6 (items 1–4, 4A–4C, 5, 5A, 6–16, 16L–16N, 17, 19): 1 Oct 2001 (s 2(1), (4), (4B), (4C), (5)) | 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 83 of 2004, effective s 4, Sch 1 (items 116–124), Sch 2 (items 1, 2, 5–8, 10–18, 20–33, 36–50, 52–64, 67–74), Sch 3 (items 4–7), Sch 5 (items 1, 2), Sch 6, Sch 8 (items 9–11), Sch 10 (items 43, 44) and Sch 12: 25 June 2004 (s 2(1) items 1, 12–14, 16, 17, 20, 27, 29, 30) Sch 1 (items 2–79): 30 June 2000 (s 2(1) item 2) Sch 1 (items 85–94): 30 June 2001 (s 2(1) items 3–5) Sch 1 (items 95–99): 24 Oct 2002 (s 2(1) item 6) Sch 1 (item 100): 19 Dec 2002 (s 2(1) item 7) Sch 1 (items 101–104) and Sch 10 (items 23–29, 30–42): 30 June 2003 (s 2(1) items 8, 9, 24–26) Sch 1 (items 105, 106): 17 Dec 2003 (s 2(1) item 10) Sch 10 (items 3–22): 29 June 2002 (s 2(1) item 23) | 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 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 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 110-35 — Incidental costs

(1) There are a number of incidental costs you may have incurred. Except for the ninth , they are costs you may have incurred: (a) to * acquire a * CGT asset; or (b) that relate to a * CGT event. (2) The first is remuneration for the services of a surveyor, valuer, auctioneer, accountant, broker, * agent, consultant or legal adviser. However, remuneration for professional advice about the operation of this Act is not included unless it is provided by a * recognised tax adviser. Note: Expenditure for professional advice about taxation incurred before 1 July 1989 does not form part of the cost base of a CGT asset: see section 110 ‑ 35 of the Income Tax (Transitional Provisions) Act 1997 . (3) The second is costs of transfer. (4) The third is stamp duty or other similar duty. (5) The fourth is: (a) if you * acquired a * CGT asset—costs of advertising or marketing to find a seller; or (b) if a * CGT event happened—costs of advertising or marketing to find a buyer. (6) The fifth is costs relating to the making of any valuation or apportionment for the purposes of this Part or Part 3 ‑ 3. (7) The sixth is search fees relating to a * CGT asset. (8) The seventh is the cost of a conveyancing kit (or a similar cost). (9) The eighth is borrowing expenses (such as loan application fees and mortgage discharge fees). (10) The ninth is expenditure that: (a) is incurred by the * head company of a * consolidated group or * MEC group to an entity that is not a * member of the group; and (b) reasonably relates to a * CGT asset * held by the head company; and (c) is incurred because of a transaction that is between members of the group. Example: Land is transferred by one company to another company. The companies are members of a consolidated group. Stamp duty is payable as a result of the transaction. The transaction has no taxation consequences because of its intra ‑ group nature. The stamp duty is included in the cost base and reduced cost base of the land. Note: Intra ‑ group assets are not held by the head company because of the operation of subsection 701 ‑ 1(1) (the single entity rule). An example of an intra ‑ group asset is a debt owed by a member of the consolidated group to another member of the group. (11) The tenth is termination or other similar fees incurred as a direct result of your ownership of a * CGT asset ending.

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 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 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) | Amended by No 136 of 2010, effective s. 4, Schedule 2, Schedule 3 (items 95, 135–149), Schedule 4, Schedule 6 (items 2–4, 6, 7) and Schedule 7 (items 1, 2, 4): Royal Assent Sch 3 (items 3–94, 96–130): 26 Mar 2009 (s 2(1) items 3, 5) Sch 3 (item 131): 1 July 2010 (s 2(1) item 6) Sch 6 (items 1, 5): 1 Apr 2010 (s 2(1) items 11, 13)

s 110-36 — Indexation

Indexation for working out capital gains of Australian resident individuals or trusts for CGT events happening on or after 1 July 2027 (1A) The cost base of a * CGT asset also includes indexation of the elements of the cost base (except the third element) for the purposes of working out the * capital gain of an individual or a trust from a * CGT event happening in relation to the CGT asset if: (a) the CGT event happens on or after 1 July 2027; and (b) the requirements of Division 114 are met. Note 1: This subsection does not extend to foreign residents or temporary residents (see section 114 ‑ 25). Note 2: This subsection is mainly relevant for a trust to the extent that the trust’s beneficiaries are individuals who are Australian residents (see Subdivision 115 ‑ C and section 114 ‑ 25). Note 3: This subsection extends to the capital gain of an individual that is attributable to a partnership of which the individual is a partner. Note 4: If an asset (including a pre ‑ CGT asset) was held on 30 June 2027, it may be taken to have been sold just before, and reacquired on, 1 July 2027 (see subsections 112 ‑ 155(2), 112 ‑ 165(2) and 112 ‑ 175(2)). For such an asset, indexation because of this subsection will happen only for the period the asset is held on or after 1 July 2027 (see subsection 960 ‑ 275(1B)). Indexation for working out capital gains in other circumstances (1) The cost base of a * CGT asset also includes indexation of the elements of the cost base (except the third element) for the purposes of working out the * capital gain of an entity from a * CGT event happening in relation to the CGT asset if: (a) the most recent * acquisition of the CGT asset is at or before 11.45 am (by legal time in the Australian Capital Territory) on 21 September 1999; and (b) for an entity that is an individual or a trust—the CGT event happens before 1 July 2027, and not because of subsection 112 ‑ 155(2) or 112 ‑ 165(2); and (c) the requirements of Division 114 are met. Note: For paragraph (b), indexation is not applicable for working out a capital gain arising: (a) directly from a CGT event taken to have happened under subsection 112 ‑ 155(2); or (b) directly or indirectly from a CGT event taken to have happened under subsection 112 ‑ 165(2). Instead, capital gains from such CGT events may be discount capital gains. (2) However, for the purposes of working out the * capital gain of an entity mentioned in an item of the table from a * CGT event happening after 11.45 am (by legal time in the Australian Capital Territory) on 21 September 1999, the cost base includes indexation because of subsection (1) only if the entity mentioned in the item chooses that the cost base includes indexation. Choice of indexation Item For the purposes of working out the capital gain of this entity: The cost base includes indexation only if this entity chooses so: 1 An individual The individual 2 A * complying superannuation entity The trustee of the complying superannuation entity 3 A trust The trustee of the trust 4 A listed investment company The company Note 1: Section 103 ‑ 25 specifies when you must make the choice and provides that the way you prepare your income tax return is evidence of your choice. Note 2: For each CGT asset whose cost base you need to work out, you may either choose to index the expenditure included in the asset’s cost base or not make that choice. If you do not choose to index the expenditure, your net capital gain includes only part of your capital gain on the CGT asset as worked out on the basis of the cost base not including indexation and reduced by your capital losses. Note 3: This subsection only applies for an individual or a trust for a CGT event happening before 1 July 2027 (see paragraph (1)(b)). (3) Also, for the purpose of working out the * capital gain of a * life insurance company from a * CGT event happening after 30 June 2000 in respect of a * CGT asset that is a * complying superannuation asset, the cost base includes indexation because of subsection (1) only if the life insurance company chooses that the cost base includes indexation. Note: Section 110 ‑ 25 of the Income Tax (Transitional Provisions) Act 1997 provides that, in working out the capital gain from a CGT event after 11.45 am on 21 September 1999 and before 1 July 2000 in respect of an asset of a life insurance company or registered organisation, the cost base includes indexation only if the company or organisation chooses it.

Amendment history: Inserted by No 32 of 2006, effective 6 Apr 2006 | Amended by No 45 of 2008, effective 26 June 2008 | Amended by No 70 of 2015, effective Sch 1 (items 65–108, 188–192, 195–205): 1 July 2015 (s 2(1) items 3, 4, 6) Sch 2 (items 17, 24–29, 34–39), Sch 6 (items 13–30, 32–38) and Sch 7 (items 1, 5–11): 25 June 2015 (s 2(1) items 7, 11, 13, 20) Sch 4 (items 1, 2) and Sch 5 (item 1): 26 June 2015 (s 2(1) items 7A, 8) Sch 4 (items 3, 4): 1 July 2025 (s 2(1) item 7B) Sch 6 (item 31): 29 June 2013 (s 2(1) item 12) The commencement date for amendments made by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 Sch 4 (items 1, 2) was retrospectively changed from 25 June 2015 to 26 June 2015 | 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 110-37 — Expenditure forming part of cost base or element

(1) If a later provision of this Subdivision says that: (a) certain expenditure does not form part of the * cost base of a * CGT asset; or (b) the cost base is reduced by certain expenditure; the expenditure is initially included in the cost base, which is then reduced by the amount of the expenditure just before a * CGT event happens in relation to the asset. Note: This has the effect of recognising in the cost base any indexed component relating to the expenditure. (2) On the other hand, if such a provision says that: (a) certain expenditure does not form part of one or more elements of the * cost base of a * CGT asset; or (b) one or more elements of the cost base are reduced by certain expenditure; the expenditure is never included in the relevant elements of the cost base. Note: This has the effect of not recognising to any extent this expenditure in the cost base.

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 110-38 — Exclusions

(1) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 54 prevents it being deducted (even if some other provision also prevents it being deducted). Note: Section 26 ‑ 54 prevents deductions for expenditure related to certain offences. (2) Expenditure does not form part of any element of the cost base to the extent that it is a * bribe to a foreign public official or a * bribe to a public official. (3) Expenditure does not form part of any element of the cost base to the extent that it is in respect of providing * entertainment. (4) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 5 prevents it being deducted (even if some other provision also prevents it being deducted). Note: Section 26 ‑ 5 denies deductions for penalties. (4A) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 31 prevents it being deducted. Note: Section 26 ‑ 31 denies deductions for travel related to the use of residential premises as residential accommodation. (5) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 47 prevents it being deducted. Note: Section 26 ‑ 47 denies deductions for the excess of boat expenditure over boat income. (6) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 22 prevents it being deducted. Note: Section 26 ‑ 22 denies deductions for political contributions and gifts. (7) Expenditure does not form any part of any element of the cost base to the extent that section 26 ‑ 97 prevents it being deducted (even if some other provision also prevents it being deducted). Note: Section 26 ‑ 97 denies deductions for National Disability Insurance Scheme expenditure. (8) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 100 prevents it being deducted. Note: Section 26 ‑ 100 denies deductions for certain expenditure on water infrastructure improvements. (8A) Expenditure does not form part of any element of the cost base to the extent that section 26 ‑ 155 prevents it being deducted. Note: Section 26 ‑ 155 denies deductions for the excess of residential dwelling related expenditure over residential dwelling related income. (9) Expenditure does not form part of any element of the cost base to the extent that a provision of Division 832 (about hybrid mismatch rules) prevents it being deducted.

Amendment history: Inserted 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 78 of 2007, effective Schedule 7 (items 2–14): 1 July 2005 Schedule 8 (items 350–353): 19 Dec 2002 (s 2(1) item 7) Remainder: Royal Assent | Amended by No 16 of 2010, effective 15 Mar 2010 | Amended by No 44 of 2013, effective Sch 3: 28 May 2013 (s 2(1) item 14) | Amended 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) | Amended by No 110 of 2014, effective Sch 1 and Sch 2 (items 2–5, 13–23): 17 Oct 2014 (s 2(1) item 2) Sch 3, Sch 4 (items 1, 3) and Sch 5 (items 16–67, 74–76, 84–91, 98–121): 16 Oct 2014 (s 2(1) items 3–5, 7) | Amended by No 126 of 2017, effective Sch 1 and 2: 1 Jan 2018 (s 2(1) item 2) | Amended by No 84 of 2018, effective Sch 1 (items 1, 8–13, 15), Sch 2 (items 1–3, 6–10), Sch 3, Sch 4 (items 2–4) and Sch 5: 1 Oct 2018 (s 2(1) item 1) | 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 110-40 — Assets acquired before 7.30 pm on 13 May 1997

(1) This section prevents some expenditure from forming part of one or more elements of the * cost base of a * CGT asset * acquired at or before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997. (The expenditure mentioned in this section can include giving property: see section 103 ‑ 5.) Note: For the cost base of a partnership interest you acquire at or before that time, see section 110 ‑ 43. (2) Expenditure does not form part of the second or third element of the cost base to the extent that you have deducted or can deduct it. (3) Expenditure does not form part of any element of the cost base to the extent of any amount you have received as * recoupment of it, except so far as the amount is included in your assessable income. (4) Subsection (2) does not apply in relation to amounts that you have deducted or can deduct under Division 243.

Amendment history: Inserted by No 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | 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 72 of 2001, effective 30 June 2001 | 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)

s 110-43 — Partnership interests acquired before 7.30 pm on 13 May 1997

(1) This section prevents some expenditure from forming part of one or more elements of the * cost base of your interest in a * CGT asset of a partnership if you * acquired the interest at or before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997. (The expenditure mentioned in this section can include giving property: see section 103 ‑ 5.) (2) Expenditure does not form part of the second or third element of the cost base to the extent that you, or a partnership in which you are or were a partner, have deducted or can deduct it. (3) Expenditure does not form part of any element of the cost base to the extent of any amount that you, or a partnership in which you are or were a partner, have received as * recoupment of the expenditure, except so far as the amount is included in your assessable income or the partnership’s assessable income. (4) Subsection (2) does not apply in relation to amounts that you have deducted or can deduct under Division 243.

Amendment history: Inserted by No 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | 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 72 of 2001, effective 30 June 2001 | 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)

s 110-45 — Assets acquired after 7.30 pm on 13 May 1997

(1) This section prevents some expenditure from forming part of the * cost base, or of an element of the cost base, of a * CGT asset * acquired after 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997. (The expenditure mentioned in this section can include giving property: see section 103 ‑ 5.) For the cost base of interests in partnership assets acquired after that time, see section 110 ‑ 50. For exceptions to the application of this section, see section 110 ‑ 53. (1A) This section also applies to expenditure incurred after 30 June 1999 on land or a building if: (a) the land or building was * acquired at or before the time mentioned in subsection (1); and (b) the expenditure forms part of the fourth element of the * cost base of the land or building. Deductible expenditure excluded from second and third elements (1B) Expenditure does not form part of the second or third element of the cost base to the extent that you have deducted or can deduct it. Other deductible expenditure (2) Expenditure (except expenditure excluded by subsection (1B)) does not form part of the cost base to the extent that you have deducted or can deduct it for an income year, except so far as: (a) the deduction has been reversed by an amount being included in your assessable income for an income year by a provision of this Act (outside this Part and Part 3 ‑ 3 and Division 243); or Note: Division 20 contains some of the provisions that reverse deductions. Section 20 ‑ 5 lists some others. (ab) the deduction is under Division 243; or (b) the deduction would have been so reversed apart from a provision listed in the table (relief from including a balancing charge in your assessable income). Provisions for relief from including a balancing charge in your assessable income Item Provision Subject matter 1 section 40 ‑ 340 Roll ‑ over relief for * depreciating asset 2 section 40 ‑ 365 Involuntary disposal of * depreciating asset Recouped expenditure (3) Expenditure does not form part of any element of the cost base to the extent of any amount you have received as * recoupment of it, except so far as the amount is included in your assessable income. Capital expenditure by previous owner that you can deduct after acquisition (4) The cost base is reduced to the extent that you have deducted or can deduct for an income year capital expenditure incurred by another entity in respect of the * CGT asset. (This rule does not apply so far as the deduction is covered by paragraph (2)(a) or (b).) Example: Under Division 43 you can deduct expenditure incurred by a previous owner of capital works you own. Landcare and water facility expenditure giving rise to a tax offset (5) Expenditure does not form part of the cost base to the extent that you choose a * tax offset for it under the former section 388 ‑ 55 (about the landcare and water facility tax offset) instead of deducting it. Heritage conservation expenditure giving rise to a tax offset (6) Expenditure does not form part of the cost base to the extent that: (a) it is eligible heritage conservation expenditure (as determined under former section 159UO of the Income Tax Assessment Act 1936 ); and (b) you could have deducted it for an income year under any of these Divisions (about capital works): (i) Division 43 of this Act; (ii) former Division 10C or 10D of Part III of that Act; but for the exclusions in paragraph 43 ‑ 70(2)(h) of this Act and former subsections 124ZB(4) and 124ZG(5) of that Act. Note: Because eligible heritage conservation expenditure is the subject of a tax offset, it is also not deductible.

Amendment history: Inserted by No 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | Amended by No 164 of 1999, effective Sch 1, Sch 2 (items 1–16, 19–23), Sch 3 (items 1–10, 14) and Sch 4–6: 10 Dec 1999 (s 2(1)) Sch 2 (items 17, 18): never commenced (s 2(2)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | 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 72 of 2001, effective 30 June 2001 | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | 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 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 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 93 of 2011, effective Schedule 1, Schedule 3 (items 1–4, 15–42, 54–107) and Schedule 4 (items 1–9): Royal Assent

s 110-50 — Partnership interests acquired after 7.30 pm on 13 May 1997

(1) This section prevents some expenditure from forming part of the * cost base, or of an element of the cost base, of your interest in a * CGT asset of a partnership if you * acquired the interest after 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997. (The expenditure mentioned in this section can include giving property: see section 103 ‑ 5.) For exceptions to the application of this section, see section 110 ‑ 53. (1A) This section also applies to expenditure incurred after 30 June 1999 on land or a building if: (a) the land or building was * acquired at or before the time mentioned in subsection (1); and (b) the expenditure forms part of the fourth element of the * cost base of the land or building. Deductible expenditure excluded from second and third elements (1B) Expenditure does not form part of the second or third element of the cost base to the extent that you, or a partnership in which you are or were a partner, have deducted or can deduct it. Other deductible expenditure (2) Expenditure (except expenditure excluded by subsection (1B) does not form part of the cost base to the extent that you, or a partnership in which you are or were a partner, have deducted or can deduct it for an income year, except so far as: (a) the deduction has been reversed by an amount being included in your assessable income for an income year, or in the assessable income of a partnership in which you are or were a partner, by a provision of this Act (outside this Part and Part 3 ‑ 3 and Division 243); or Note: Division 20 contains some of the provisions that reverse deductions. Section 20 ‑ 5 lists some others. (ab) the deduction is under Division 243; or (b) the deduction would have been so reversed apart from a provision listed in the table in subsection 110 ‑ 45(2) (relief from including a balancing charge in your assessable income). Recouped expenditure (3) Expenditure does not form part of any element of the cost base to the extent of any amount that you, or a partnership in which you are or were a partner, have received as * recoupment of it, except so far as the amount is included in your assessable income or the partnership’s assessable income. Capital expenditure by previous owner of the asset (4) The cost base is reduced to the extent that you, or a partnership in which you are or were a partner, have deducted or can deduct for an income year capital expenditure incurred by another entity in respect of the * CGT asset. (This rule does not apply so far as the deduction is covered by paragraph (2)(a) or (b).) Example: Under Division 43 an entity can deduct expenditure incurred by a previous owner of capital works that the entity owns. Landcare and water facility expenditure giving rise to a tax offset (5) Expenditure does not form part of the cost base to the extent that you choose a * tax offset for it under the former section 388 ‑ 55 (about the landcare and water facility tax offset) instead of deducting it. Heritage conservation expenditure giving rise to a tax offset (6) Expenditure does not form part of the cost base to the extent that: (a) it is eligible heritage conservation expenditure (as determined under former section 159UO of the Income Tax Assessment Act 1936 ); and (b) you, or a partnership in which you are or were a partner, could have deducted it for an income year under any of these Divisions (about capital works): (i) Division 43 of this Act; (ii) former Division 10C or 10D of Part III of that Act; but for the exclusions in paragraph 43 ‑ 70(2)(h) of this Act and former subsections 124ZB(4) and 124ZG(5) of that Act. Note: Because eligible heritage conservation expenditure is the subject of a tax offset, it is also not deductible.

Amendment history: Inserted by No 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | 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 72 of 2001, effective 30 June 2001 | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | 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 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent

s 110-53 — Exceptions to application of sections 110 ‑ 45 and 110 ‑ 50

(1) Subsection 110 ‑ 45(2), (4), (5) or (6) or 110 ‑ 50(2), (4), (5) or (6) does not prevent expenditure from forming part of the cost base to the extent that the deduction mentioned in that subsection could reasonably be regarded as arising before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997, or as relating to a period before that time. (2) Subsections 110 ‑ 45(5) and (6) and 110 ‑ 50(5) and (6) do not apply to expenditure incurred before the day on which the Bill that became the Taxation Laws Amendment Act (No. 1) 1999 was introduced into the House of Representatives.

Amendment history: Inserted by No 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | 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 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)

s 110-54 — Debt deductions disallowed by thin capitalisation rules

Expenditure does not form part of the third element of the cost base to the extent that Division 820 (Thin capitalisation rules) prevented or prevents you, or a partnership in which you are or were a partner, from deducting it.

Amendment history: Inserted by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13)

s 110-55 — General rules about reduced cost base

(1) The reduced cost base of a * CGT asset consists of 5 elements. It does not include indexation of those elements. Note: The reduced cost base is reduced by net input tax credits: see section 103 ‑ 30. 5 elements of the reduced cost base (2) All of the elements (except the third one) of the reduced cost base of a * CGT asset are the same as those for the * cost base. (3) The third element is: (a) any amounts worked out under whichever of the following subparagraphs applies: (i) if Division 58 does not apply to the asset—any amount included in your assessable income for any income year because of a balancing adjustment for the asset; (ii) if Division 58 applies to the asset and an amount has been included in your assessable income for an income year because of a balancing adjustment for the asset—any part of that amount that was attributable to amounts you have deducted or can deduct for the decline in value of the asset; and (b) any amount that would have been so included apart from any of these (which provide relief from including a balancing charge in your assessable income): (i) section 40 ‑ 365; or (ii) any of these former sections—section 42 ‑ 285, 42 ‑ 290 or 42 ‑ 293; or (iii) former subsection 59(2A) or (2D) of the Income Tax Assessment Act 1936 . What does not form part of the reduced cost base (4) The reduced cost base does not include an amount to the extent that you have deducted or can deduct it (including because of a balancing adjustment) or could have deducted apart from paragraph 43 ‑ 70(2)(h). Note: That paragraph excludes from deductibility under Division 43 expenditure that qualifies for the heritage conservation rebate. (5) The reduced cost base does not include an amount that you could have deducted for a * CGT asset had you used it wholly for the * purpose of producing assessable income. (6) Expenditure does not form part of the reduced cost base to the extent of any amounts you have received as * recoupment of it. However, this rule does not apply to the extent that the amounts are included in your assessable income. (6A) Expenditure does not form part of the reduced cost base to the extent that you chose a * tax offset for it under the former section 388 ‑ 55 (about the landcare and water facility tax offset) instead of deducting it. (7) If your * CGT asset is a * share in a company, its reduced cost base is reduced by the amount calculated under subsection (8) if: (aa) you are a * corporate tax entity; and (a) the company makes a distribution to you under an * arrangement; and (b) an amount (the attributable amount ) representing the distribution or part of it is reasonably attributable to profits * derived by the company before you c acquired the share; and (c) you are entitled to a * tax offset under Division 207 on the part of the distribution that is a * dividend (the dividend amount ); and (d) you were a * controller (for CGT purposes) of the company, or an * associate of such a controller, when the arrangement was made or carried out. (8) The amount of the reduction is: (9) The reduced cost base is to be reduced by any amount that you have deducted or can deduct, or could have deducted except for Subdivision 170 ‑ D, as a result of a * CGT event that happens in relation to a * CGT asset. However, do not make a reduction for an amount that relates to a cost that could never have formed part of the reduced cost base or is excluded from the reduced cost base as a result of another provision of this section. (9A) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 54 prevents it being deducted (even if some other provision also prevents it being deducted). Note: Section 26 ‑ 54 prevents deductions for expenditure related to certain offences. (9B) Expenditure does not form part of the reduced cost base to the extent that it is a * bribe to a foreign public official or a * bribe to a public official. (9C) Expenditure does not form part of the reduced cost base to the extent that it is in respect of providing * entertainment. (9D) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 5 prevents it being deducted (even if some other provision also prevents it being deducted). Note: Section 26 ‑ 5 denies deductions for penalties. (9E) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 47 prevents it being deducted. Note: Section 26 ‑ 47 denies deductions for the excess of boat expenditure over boat income. (9F) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 22 prevents it being deducted. Note: Section 26 ‑ 22 denies deductions for political contributions and gifts. (9G) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 100 prevents it being deducted. Note: Section 26 ‑ 100 denies deductions for certain expenditure on water infrastructure improvements. (9H) Expenditure does not form any part of any element of the reduced cost base to the extent that section 26 ‑ 97 prevents it being deducted (even if some other provision also prevents it being deducted). Note: Section 26 ‑ 97 denies deductions for National Disability Insurance Scheme expenditure. (9J) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 31 prevents it being deducted. Note: Section 26 ‑ 31 denies deductions for travel related to the use of residential premises as residential accommodation. (9JA) Expenditure does not form part of the reduced cost base to the extent that section 26 ‑ 155 prevents it being deducted. Note: Section 26 ‑ 155 denies deductions for the excess of residential dwelling related expenditure over residential dwelling related income. (9K) Expenditure does not form part of the reduced cost base to the extent that a provision of Division 832 (about hybrid mismatch rules) prevents it being deducted. Assume a CGT event for purposes of working out reduced cost base at a particular time (10) If: (a) it is necessary to work out the * reduced cost base at a particular time; and (b) a * CGT event does not happen in relation to the asset at or just after that time; assume, for the purpose only of working out the reduced cost base at the particular time, that such an event does happen in relation to the asset at or just after that 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 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | Amended by No 93 of 1999, effective Schedule 4 (item 24): 16 Apr 1998 Remainder: Royal Assent | Amended by No 164 of 1999, effective Sch 1, Sch 2 (items 1–16, 19–23), Sch 3 (items 1–10, 14) and Sch 4–6: 10 Dec 1999 (s 2(1)) Sch 2 (items 17, 18): never commenced (s 2(2)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 83 of 2004, effective s 4, Sch 1 (items 116–124), Sch 2 (items 1, 2, 5–8, 10–18, 20–33, 36–50, 52–64, 67–74), Sch 3 (items 4–7), Sch 5 (items 1, 2), Sch 6, Sch 8 (items 9–11), Sch 10 (items 43, 44) and Sch 12: 25 June 2004 (s 2(1) items 1, 12–14, 16, 17, 20, 27, 29, 30) Sch 1 (items 2–79): 30 June 2000 (s 2(1) item 2) Sch 1 (items 85–94): 30 June 2001 (s 2(1) items 3–5) Sch 1 (items 95–99): 24 Oct 2002 (s 2(1) item 6) Sch 1 (item 100): 19 Dec 2002 (s 2(1) item 7) Sch 1 (items 101–104) and Sch 10 (items 23–29, 30–42): 30 June 2003 (s 2(1) items 8, 9, 24–26) Sch 1 (items 105, 106): 17 Dec 2003 (s 2(1) item 10) Sch 10 (items 3–22): 29 June 2002 (s 2(1) item 23) | 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 23 of 2005, effective s. 4, Schedule 1 (items 2–8, 11, 13–19, 21–24, 26, 27, 29–32), Schedule 2 (items 1–11, 14), Schedule 3 (items 1–13, 75–102, 111(1)–(3)), Schedules 4–6, 8, 10 and Schedule 12 (items 2–6, 11(1)): Royal Assent Schedule 12 (item 1): 1 July 2000 | 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 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 78 of 2007, effective Schedule 7 (items 2–14): 1 July 2005 Schedule 8 (items 350–353): 19 Dec 2002 (s 2(1) item 7) Remainder: Royal Assent | Amended by No 16 of 2010, effective 15 Mar 2010 | Amended by No 44 of 2013, effective Sch 3: 28 May 2013 (s 2(1) item 14) | Amended 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) | Amended by No 110 of 2014, effective Sch 1 and Sch 2 (items 2–5, 13–23): 17 Oct 2014 (s 2(1) item 2) Sch 3, Sch 4 (items 1, 3) and Sch 5 (items 16–67, 74–76, 84–91, 98–121): 16 Oct 2014 (s 2(1) items 3–5, 7) | Amended by No 126 of 2017, effective Sch 1 and 2: 1 Jan 2018 (s 2(1) item 2) | Amended by No 84 of 2018, effective Sch 1 (items 1, 8–13, 15), Sch 2 (items 1–3, 6–10), Sch 3, Sch 4 (items 2–4) and Sch 5: 1 Oct 2018 (s 2(1) item 1) | 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 110-60 — Reduced cost base for partnership assets

(1) The third element of an entity’s reduced cost base for its interest in a * CGT asset of a partnership is the entity’s share of: (a) any amounts worked out under whichever of the following subparagraphs applies: (i) if Division 58 does not apply to the asset—any amount included in the assessable income of the partnership for any income year because of a balancing adjustment for the asset; (ii) if Division 58 applies to the asset and an amount has been included in the assessable income of the partnership for an income year because of a balancing adjustment for the asset—any part of that amount that was attributable to amounts that the partnership has deducted or can deduct for depreciation of the asset; and (b) any amount that would have been so included apart from any of these (which provide relief from including a balancing charge in your assessable income): (i) section 40 ‑ 365; or (ii) any of these former sections—section 42 ‑ 285, 42 ‑ 290 or 42 ‑ 293; or (iii) former subsection 59(2A) or (2D) of the Income Tax Assessment Act 1936 ; calculated according to the entity’s share in the partnership net income or net loss. (2) Expenditure does not form part of an entity’s reduced cost base for its interest in a * CGT asset of a partnership to the extent that a partnership in which the entity is or was a partner has deducted or can deduct it (including because of a balancing adjustment), or could have deducted it apart from paragraph 43 ‑ 70(2)(h). (3) Expenditure does not form part of an entity’s reduced cost base for its interest in a * CGT asset of a partnership to the extent that a partnership in which the entity is or was a partner could have deducted an amount for the asset if it had used it wholly for the * purpose of producing assessable income. (4) Expenditure does not form part of an entity’s reduced cost base for its interest in a * CGT asset of a partnership to the extent of any amounts that a partnership in which the entity is or was a partner has received as * recoupment of it and that are not included in the assessable income of the partnership. (4A) Expenditure does not form part of an entity’s reduced cost base for its interest in a * CGT asset of a partnership to the extent that the entity chose a * tax offset for the expenditure under the former section 388 ‑ 55 (about the landcare and water facility tax offset) instead of deducting it. (7) The reduced cost base of an entity’s interest in a * CGT asset of a partnership is to be reduced by the entity’s share of any amount that the partnership has deducted or can deduct, or could have deducted except for Subdivision 170 ‑ D, as a result of a * CGT event that happens in relation to the asset. However, a reduction is not to be made for an amount that relates to a cost that could never have formed part of the reduced cost base or is excluded from the reduced cost base as a result of another provision of this section.

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 16 of 1999, effective s 4, Sch 3 (items 11, 12(3)), Sch 4 and Sch 7 (items 9–14): 9 Apr 1999 (s 2(1)) | Amended by No 93 of 1999, effective Schedule 4 (item 24): 16 Apr 1998 Remainder: Royal Assent | Amended by No 164 of 1999, effective Sch 1, Sch 2 (items 1–16, 19–23), Sch 3 (items 1–10, 14) and Sch 4–6: 10 Dec 1999 (s 2(1)) Sch 2 (items 17, 18): never commenced (s 2(2)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 23 of 2005, effective s. 4, Schedule 1 (items 2–8, 11, 13–19, 21–24, 26, 27, 29–32), Schedule 2 (items 1–11, 14), Schedule 3 (items 1–13, 75–102, 111(1)–(3)), Schedules 4–6, 8, 10 and Schedule 12 (items 2–6, 11(1)): Royal Assent Schedule 12 (item 1): 1 July 2000 | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent

s 112-1 — What this Division is about

This Division tells you the situations that may modify the general rules about the cost base and reduced cost base of a 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 112-5 — Discussion of modifications

(1) Modifications can occur from the time you acquired the CGT asset to when a CGT event happens in relation to it. Note: You should keep records of the modifications: see Division 121. (2) Most modifications replace the first element (what you paid for a CGT asset) of the cost base and reduced cost base of the asset. (3) Subdivision 112 ‑ A contains operative provisions setting out the general situations that may result in a modification to the general rules. (4) Subdivision 112 ‑ B (which is a guide) has a number of tables (each one covering a specialist topic) that tell you each situation that may result in a modification to the general rules. (5) Subdivision 112 ‑ C (which is a guide) explains what a replacement ‑ asset roll ‑ over is and how it can modify the cost base or reduced cost base. (6) Subdivision 112 ‑ D (which is a guide) explains what a same ‑ asset roll ‑ over is and how it can modify the cost base or reduced cost base. (6A) Subdivision 112 ‑ E contains operative provisions setting out some deemed sales and reacquisitions that may result in a modification to the general rules. (7) Section 230 ‑ 505 provides special rules for working out the amount of consideration for an asset if the asset is a * Division 230 financial arrangement or a Division 230 financial arrangement is involved in that consideration.

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 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) | 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 112-15 — General rule for replacement modifications

If a cost base modification replaces an element of the * cost base of a * CGT asset with an amount, this Part and Part 3 ‑ 3 apply to you as if you had paid that amount. Example: An individual pays $10,000 to acquire an option. The individual dies and the option devolves to his legal personal representative, who exercises the option. Section 134 ‑ 1 applies to the legal personal representative as if the representative had paid $10,000 for the option.

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 112-20 — Market value substitution rule

(1) The first element of your * cost base and * reduced cost base of a * CGT asset you * acquire from another entity is its * market value (at the time of acquisition) if: (a) you did not incur expenditure to acquire it, except where your acquisition of the asset resulted from: (i) * CGT event D1 happening; or (ii) another entity doing something that did not constitute a CGT event happening; or (b) some or all of the expenditure you incurred to acquire it cannot be valued; or (c) you did not deal at * arm’s length with the other entity in connection with the acquisition. The expenditure can include giving property: see section 103 ‑ 5. (2) Despite paragraph (1)(c), if: (a) you did not deal at * arm’s length with the other entity; and (b) your * acquisition of the * CGT asset resulted from another entity doing something that did not constitute a CGT event happening; the * market value is substituted only if what you paid to acquire the CGT asset was more than its market value (at the time of acquisition). The payment can include giving property: see section 103 ‑ 5. (3) There are some situations in which the rule in subsection (1) does not apply. They include the situations set out in this table: Exceptions to the market value substitution rule Item You * acquired this CGT asset: ...in this situation: 1 A right to receive * ordinary income or * statutory income from a trust (except a unit trust or a trust that arises because of someone’s death) (a) you did not pay or give anything for the right; and (b) you did not acquire the right by way of an assignment from another entity 2 A decoration awarded for valour or brave conduct you did not pay or give anything for it 3 A contractual or other legal or equitable right resulting from * CGT event D1 happening you did not pay or give anything for it 4 Rights to * acquire: (a) * shares, or options to acquire * shares, in a company; or (b) units, or options to acquire units, in a unit trust; in a situation covered by Subdivision 130 ‑ B you did not pay or give anything for the rights 5 A * share in a company or a right to * acquire a share or * debenture in a company it was issued or allotted to you by the company and you did not pay or give anything for it 6 A unit in a unit trust or a right to * acquire a unit or debenture in a unit trust it was issued to you by the trustee of the unit trust and you did not pay or give anything for it 7 A right to * dispose of a * share in a company it was issued to you by the company and was exercised by you or by another entity who became the owner of the right Note 1: Disregard subsections (2) and (3) for shares or units that you acquired before 16 August 1989: see section 112 ‑ 20 of the Income Tax (Transitional Provisions) Act 1997 . Note 2: This section does not apply to ESS interests acquired under employee share schemes: see subsection 130 ‑ 80(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)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | 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 91 of 2008, effective Schedule 1: Royal Assent | 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 | 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 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)

s 112-25 — Split, changed or merged assets

Split or changed assets (1) This section sets out what happens if: (a) a * CGT asset (the original asset ) is split into 2 or more assets (the new assets ); or (b) a * CGT asset (also the original asset ) changes in whole or in part into an asset (also the new asset ) of a different nature; and you are the beneficial owner of the original asset and each new asset. Example: You subdivide a block of land into 3 separate blocks. Each of those blocks is a new asset . (2) The splitting or change is not a * CGT event. (3) You work out the * cost base and * reduced cost base of each new asset as follows: Method statement Step 1. Work out each element of the * cost base and * reduced cost base of the original asset at the time of the event referred to in subsection (1). Step 2. Apportion in a reasonable way each element to each new asset. The result is each corresponding element of the new asset’s * cost base and * reduced cost base. Merged assets (4) If 2 or more * CGT assets (the original assets ) are merged into a single asset (the new asset ) and you are the beneficial owner of the original assets and the new asset: (a) the merger is not a * CGT event; and (b) each element of the * cost base and * reduced cost base of the new asset (at the time of the merging) is the sum of the corresponding elements of each original 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 112-30 — Apportionment rules

Apportionment on acquisition of an asset (1) If you * acquire a * CGT asset because of a transaction and only part of the expenditure you incurred under the transaction relates to the acquisition of the asset, the first element of your * cost base and * reduced cost base of the asset is that part of the expenditure that is reasonably attributable to the acquisition of the asset. The expenditure can include giving property: see section 103 ‑ 5. Apportionment of expenditure in other elements (1A) If you incur expenditure and only part of it relates to another element of the * cost base or * reduced cost base of a * CGT asset, that element includes that part of the expenditure that is reasonably attributable to that element. Apportionment for CGT asset that was part of another asset (2) The * cost base and * reduced cost base of a * CGT asset is apportioned if a * CGT event happens to some part of the asset, but not to the remainder of it. Note: The full list of CGT events is in section 104 ‑ 5. (3) The * cost base for the * CGT asset representing the part to which the * CGT event happened is worked out using the formula: The * reduced cost base is worked out similarly. (4) The remainder of the * cost base and * reduced cost base of the asset is attributed to the part that remains. Example: You acquire a truck for $24,000 and sell its motor for $9,000. Suppose the market value of the remainder of the truck is $16,000. Under subsection (3), the cost base of the motor is: Under subsection (4), the cost base of the remainder of the truck is: (5) However, an amount forming part of the * cost base or * reduced cost base of the asset is not apportioned if, on the facts, that amount is wholly attributable to the part to which the * CGT event happened or to the remaining part.

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 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent

s 112-35 — Assumption of liability rule

If you * acquire a * CGT asset from another entity that is subject to a liability, the first element of your * cost base and * reduced cost base of the asset includes the amount of the liability you assume. Example: You acquire a block of land for $150,000. You pay $50,000 and assume a liability for an outstanding mortgage of $100,000. The first element of your cost base and reduced cost base is $150,000. Note: The first element of cost base is dealt with in subsection 110 ‑ 25(2). The first element of reduced cost base is the same: see subsection 110 ‑ 55(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))

s 112-36 — Acquisitions of assets involving look ‑ through earnout rights

Consequences for cost base and reduced cost base (1) If you * acquire a * CGT asset because an entity * disposes of the CGT asset to you, and that disposal causes * CGT event A1 (the first CGT event ) to happen: (a) neither the * cost base nor the * reduced cost base of the CGT asset includes the value of any * look ‑ through earnout right relating to the CGT asset and the acquisition; and (b) include in the first element of the CGT asset’s cost base and reduced cost base any * financial benefit that you provide under such a look ‑ through earnout right; and (c) reduce the first element of the CGT asset’s cost base and reduced cost base by an amount equal to the amount of any financial benefit that you receive under such a look ‑ through earnout right. Remaking choices affected by the look ‑ through earnout right (2) Despite section 103 ‑ 25, you may remake any choice you made under this Part or Part 3 ‑ 3 for a later * CGT event involving the * CGT asset if: (a) after the later CGT event, you provide or receive a * financial benefit under such a * look ‑ through earnout right; and (b) you remake the choice at or before the time you are required to lodge your * income tax return for the income year in which the financial benefit is provided or received. Amending assessments affected by the look ‑ through earnout right (3) The Commissioner may amend an assessment of a * tax ‑ related liability if: (a) an entity provides or receives a * financial benefit under such a * look ‑ through earnout right; and (b) the amount of the tax ‑ related liability: (i) depends on that entity’s taxable income for an income year in which a * CGT event, involving the * CGT asset, happens after the first CGT event but before the financial benefit is provided or received; or (ii) is otherwise affected by that right’s character as a look ‑ through earnout right; and (c) the Commissioner makes the amendment before the end of the 4 ‑ year period starting at the end of the income year in which the last possible financial benefit becomes or could become due under the look ‑ through earnout right. The tax ‑ related liability need not be a liability of that entity. Note: Subparagraph (b)(ii) covers changes to the amount of that tax ‑ related liability that happen directly or indirectly because of subsection (1) or (2). (4) If at a particular time a right is taken never to have been a * look ‑ through earnout right because of subsection 118 ‑ 565(2), the Commissioner may amend an assessment of a * tax ‑ related liability for up to 4 years after that time if: (a) an entity provides or receives a * financial benefit under the right; and (b) the amount of the tax ‑ related liability: (i) depends on that entity’s taxable income for an income year in which a * CGT event, involving the * CGT asset, happens after the first CGT event but before the financial benefit is provided or received; or (ii) was otherwise affected by that right’s character as a look ‑ through earnout right before subsection 118 ‑ 565(2) applied. The tax ‑ related liability need not be a liability of that entity. Note: Subsection 118 ‑ 565(2) restricts look ‑ through earnout rights to rights to financial benefits over a period not exceeding 5 years from the end of the income year in which the first CGT event happens. (5) If, after providing or receiving a * financial benefit under a right referred to in subsection (3) or (4): (a) you are dissatisfied with an assessment referred to in that subsection; and (b) the Commissioner notifies you that the Commissioner has decided under that subsection not to amend your assessment; you may object against the assessment, to the extent that it does not take account of that right’s character (as a * look ‑ through earnout right or not such a right), in the manner set out in Part IVC of the Taxation Administration Act 1953 .

Amendment history: Inserted 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 112-37 — Put options

The first element of the * cost base and * reduced cost base of a right to * dispose of a * share in a company that you * acquire as a result of * CGT event D2 happening to the company is the sum of: (a) the amount that is included in your assessable income as ordinary income as a result of your acquisition of the right; and (b) the amount (if any) that you paid to acquire the right.

Amendment history: Inserted by No 91 of 2008, effective Schedule 1: Royal Assent

s 112-40 — Effect of this Subdivision

(1) This Subdivision is a * Guide. Note: In interpreting an operative provision, a Guide may be considered only for limited purposes: see section 950 ‑ 150. (2) It sets out which element of the cost base or reduced cost base of a CGT asset is affected by various situations.

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 112-45 — CGT events

CGT events Event number In this situation: Element affected: See section: D4 A conservation covenant is entered into over land The total cost base and reduced cost base 104 ‑ 47 E1 A trust is created over a CGT asset First element of cost base and reduced cost base 104 ‑ 55 E2 A CGT asset is transferred to a trust First element of cost base and reduced cost base 104 ‑ 60 E4 A trustee makes a capital payment to you in relation to units or an interest in the trust The total cost base and reduced cost base 104 ‑ 70 F4 A lessee receives payment for changing lease The total cost base 104 ‑ 125 G1 A company makes a capital payment to you in relation to your shares The total cost base and reduced cost base 104 ‑ 135 G3 A liquidator or administrator declares shares or financial instruments to be worthless The total cost base and reduced cost base 104 ‑ 145 K8 Direct value shifts affecting your equity or loan interests in a company or trust The total cost base and reduced cost base Subdivision 725 ‑ D J4 Trust fails to cease to exist after a roll ‑ over under Subdivision 124 ‑ N First element of cost base and reduced cost base 104 ‑ 195

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 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 167 of 2001, effective Sch 4 (items 8–10) and Sch 7 and 8: 1 Oct 2001 (s 2(1)) | Amended by No 53 of 2002, effective Schedules 3 and 4: 1 July 2002 Remainder: Royal Assent | Amended by No 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3) | Amended by No 23 of 2005, effective s. 4, Schedule 1 (items 2–8, 11, 13–19, 21–24, 26, 27, 29–32), Schedule 2 (items 1–11, 14), Schedule 3 (items 1–13, 75–102, 111(1)–(3)), Schedules 4–6, 8, 10 and Schedule 12 (items 2–6, 11(1)): Royal Assent Schedule 12 (item 1): 1 July 2000 | 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)

s 112-46 — Annual cost base adjustment for member’s unit or interest in AMIT

Annual cost base adjustment for member’s unit or interest in AMIT Item In this situation: Element affected: See section: 1 Annual cost base adjustment for member’s unit or interest in AMIT The total cost base and reduced cost base 104 ‑ 107B

Amendment history: Inserted by No 53 of 2016, effective Sch 1 (item 1), Sch 2, Sch 3 (items 2–4), Sch 4 (items 1–5), Sch 5 (items 2, 29–67, 75), Sch 6 (items 21–34), Sch 8 (item 1) and Sch 9: 5 May 2016 (s 2(1) items 2, 4)

s 112-48 — Gifts acquired by associates

Gifts acquired by associates Item In this situation: Element affected: See section: 1 A gift of property is covered by subsection 118 ‑ 60(1) or (2) and the property is later * acquired by an associate for less than market value First element of cost base and reduced cost base 118 ‑ 60

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13))

s 112-50 — Main residence

Main residence Item In this situation: Element affected: See section: 1 A dwelling that is your main residence begins to be used for the first time for the purpose of producing assessable income The total cost base and reduced cost base 118 ‑ 192

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 112-53 — Scrip for scrip roll ‑ over

Scrip for scrip roll ‑ over Item In this situation: Element affected: See section: 1 Interest is acquired by an entity where there is a roll ‑ over under Subdivision 124 ‑ M and there is a significant or common stakeholder under an arrangement First element of cost base and reduced cost base 124 ‑ 782 2 Equity or debt is acquired by a member of a wholly ‑ owned group under that arrangement from another member of the group First element of cost base and reduced cost base 124 ‑ 784 2A Interest is acquired by an entity where there is a roll ‑ over under Subdivision 124 ‑ M and the arrangement is taken to be a restructure First element of cost base and reduced cost base 124 ‑ 784B 3 You exchange an interest you acquired before 20 September 1985 for an interest in another entity The total cost base and reduced cost base 124 ‑ 800

Amendment history: Inserted 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 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 135 of 2015, effective Sch 1: 13 Oct 2015 (s 2(1) item 2)

s 112-53AA — Statutory licences

New statutory licence Item In this situation: Element affected: See section: 1 New statutory licences First element of cost base and reduced cost base 124 ‑ 150, 124 ‑ 155 and 124 ‑ 160

Amendment history: Inserted by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9)

s 112-53AB — Change of incorporation

Change of incorporation Item In this situation: Element affected: See section: 1 Shares in company that has changed its incorporation or has ownership not significantly different from that of a former body incorporated under another law First element of cost base and reduced cost base 124 ‑ 530

Amendment history: Inserted 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 112-53A — MDO roll ‑ over

MDO roll ‑ over Item In this situation: Element affected: See section: 1 Exchange of an interest in an MDO for an interest in another MDO First element of cost base and reduced cost base 124 ‑ 985

Amendment history: Inserted by No 143 of 2007, effective Schedule 1 (items 1, 4, 128–194, 222, 223, 225, 226), Schedule 2, Schedule 5 (items 1–16, 48(1)–(3)), Schedule 6 and Schedule 7 (items 18–68): Royal Assent Schedule 5 (items 31–46): 15 Mar 2007 (s 2(1) item 6)

s 112-53B — Exchange of stapled ownership interests for units in a unit trust

Exchange of stapled ownership interests for units in a unit trust Item In this situation: Element affected: See section: 1 Exchange of stapled ownership interests First element of cost base and reduced cost base 124 ‑ 1055 and 124 ‑ 1060

Amendment history: Inserted by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9)

s 112-53C — Water entitlement roll ‑ overs

Roll ‑ over for water entitlements Item In this situation: Element affected: See section: 1 You replace one or more water entitlements with one or more new water entitlements First element of cost base and reduced cost base 124 ‑ 1120 and 124 ‑ 1130 2 You have a reduction in one or more water entitlements that you own First element of cost base and reduced cost base 124 ‑ 1145 and 124 ‑ 1150 3 A CGT event happens to an asset you own as a result of the replacement of water entitlements First element of cost base and reduced cost base 124 ‑ 1165

Amendment history: Inserted by No 136 of 2010, effective s. 4, Schedule 2, Schedule 3 (items 95, 135–149), Schedule 4, Schedule 6 (items 2–4, 6, 7) and Schedule 7 (items 1, 2, 4): Royal Assent Sch 3 (items 3–94, 96–130): 26 Mar 2009 (s 2(1) items 3, 5) Sch 3 (item 131): 1 July 2010 (s 2(1) item 6) Sch 6 (items 1, 5): 1 Apr 2010 (s 2(1) items 11, 13)

s 112-54 — Demergers

Demergers Item In this situation: Element affected: See section: 1 There is a roll ‑ over under Subdivision 125 ‑ B after a demerger First element of cost base and reduced cost base of new interests and remaining original interests 125 ‑ 80 2 There is a CGT event under a demerger but no roll ‑ over under Subdivision 125 ‑ B First element of cost base and reduced cost base of new interests and remaining original interests 125 ‑ 85 3 There is a cost base adjustment under Subdivision 125 ‑ B but no CGT event under a demerger First element of cost base and reduced cost base of new interests and remaining original interests 125 ‑ 90

Amendment history: Inserted by No 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3)

s 112-54A — Transfer of assets between certain trusts

Transfer of assets between certain trusts Item In this situation: Element affected: See sections: 1 There is a roll ‑ over under Subdivision 126 ‑ G relating to the transfer of a CGT asset between certain trusts First element of cost base and reduced cost base of the CGT asset 126 ‑ 240 2 There is a roll ‑ over under Subdivision 126 ‑ G relating to the transfer of a CGT asset between certain trusts Cost base and reduced cost base of membership interests in each trust 126 ‑ 245 and 126 ‑ 250

Amendment history: Inserted by No 19 of 2010, effective Sch 1 (items 1–13, 16–20), Sch 3 (items 11, 12), Sch 4 (items 3–6) and Sch 5 (item 6): 24 Mar 2010 (s 2(1) items 2, 9, 11, 14) Sch 2 (items 1–11): 25 Mar 2010 (s 2(1) item 3) Sch 2 (items 12–26):repealed before commencing (s 2(1) item 4) Sch 3 (items 1, 2): 30 June 2000 (s 2(1) item 5) Sch 3 (items 4–8): 15 Mar 2007 (s 2(1) item 7) Sch 4 (items 1, 2): 4 June 2009 (s 2(1) item 10) Sch 5 (items 2, 3): 25 Feb 2009 (s 2(1) item 12) Sch 5 (items 4, 5): 1 July 2011 (s 2(1) item 13)

s 112-55 — Effect of you dying

Effect of an individual dying Item In this situation: Element affected: See section: 1 CGT asset devolves to the legal personal representative First element of cost base and reduced cost base 128 ‑ 15 2 CGT asset passes to a beneficiary First element of cost base and reduced cost base 128 ‑ 15 3 CGT asset passes to a trustee of a complying superannuation entity First element of cost base and reduced cost base 128 ‑ 25 4 Surviving joint tenant acquires deceased joint tenant’s interest in CGT asset First element of cost base and reduced cost base 128 ‑ 50

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 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 112-60 — Bonus shares or units

Bonus shares or units Item In this situation: Element affected: See section: 1 A company issues you with bonus shares First element of cost base and reduced cost base 130 ‑ 20 2 A unit trust issues you with bonus units First element of cost base and reduced cost base 130 ‑ 20

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 63 of 1998, effective Sch 6: 1 July 1998 (s 2(3)(a))

s 112-65 — Rights

Exercise of rights Item In this situation: Element affected: See section: 1 You exercise rights to acquire shares, or options to acquire shares, in a company First element of cost base and reduced cost base 130 ‑ 40 2 You exercise rights to acquire units, or options to acquire units, in a unit trust First element of cost base and reduced cost base 130 ‑ 40

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 112-70 — Convertible interests

Convertible interests Item In this situation: Element affected: See section: 1 You acquire shares, or units in a unit trust, by converting a convertible interest First element of cost base and reduced cost base 130 ‑ 60

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)) | Repealed and substituted by No 163 of 2001, effective 1 July 2001

s 112-77 — Exchangeable interests

Exchangeable interests Item In this situation: Element affected: See section: 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 First element of cost base and reduced cost base 130 ‑ 105 2 You acquire shares in a company in exchange for the redemption of an exchangeable interest First element of cost base and reduced cost base 130 ‑ 105

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

s 112-78 — Exploration investments

Exploration investments Item In this situation: Element affected: See section: 1 An exploration investment in the form of a share is disposed of The total reduced cost base 130 ‑ 110

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)

s 112-80 — Leases

Leases Item In this situation: Element affected: See section: 1 A lessee incurs expenditure in obtaining the lessor’s agreement to vary or waive a term of the lease Fourth element of cost base and reduced cost base 132 ‑ 1 2 A lessor pays an amount to the lessee for improvements made by the lessee to the property Fourth element of cost base and reduced cost base 132 ‑ 5 3 A lessor of a long ‑ term lease incurs expenditure in obtaining the lessee’s agreement to vary or waive a term of the lease or to forfeit or surrender the lease Fourth element of cost base and reduced cost base 132 ‑ 10 4 A lessee of land acquires the reversionary interest of the lessor First element of cost base and reduced cost base 132 ‑ 15

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 112-85 — Options

Exercise of options Item In this situation: Element affected: See section: 1 Grantee of option acquires the CGT asset the subject of the option First element of cost base and reduced cost base 134 ‑ 1 2 Grantor of option acquires the CGT asset the subject of the option For the grantor—the first element of cost base and reduced cost base; For the grantee—the second element of cost base and reduced cost base 134 ‑ 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))

s 112-87 — Residency

Residency Item In this situation: Element affected: See section: 1 An individual or company becomes an Australian resident (but not a temporary resident) First element of cost base and reduced cost base 855 ‑ 45 1A A temporary resident ceases to be a temporary resident (but remains, at that time, an Australian resident) First element of cost base and reduced cost base 768 ‑ 955 2 A trust becomes a resident trust for CGT purposes First element of cost base and reduced cost base 855 ‑ 50

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 32 of 2006, effective 6 Apr 2006 | 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)

s 112-90 — An asset stops being a pre ‑ CGT asset

An asset stops being a pre ‑ CGT asset Item In this situation: Element affected: See section: 1 An asset of a non ‑ public entity stops being a pre ‑ CGT asset The total cost base and reduced cost base 149 ‑ 35 2 An asset of a public entity stops being a pre ‑ CGT asset The total cost base and reduced cost base 149 ‑ 75

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 112-92 — Demutualisation of certain entities

Demutualisation of certain entities Item In this situation: Element affected: See section: 1 Just before the mutual entity known in New Zealand as Tower Corporation ceased to be a mutual entity, you had membership rights in that entity The total cost base and reduced cost base 118 ‑ 550

Amendment history: Inserted by No 57 of 2002, effective Sch 2: 1 July 2002 (s 2(1) item 3) Sch 4 (items 3, 4): 1 July 2000 (s 2(1) item 5) Sch 4 (items 5–8), Sch 7, Sch 9 (items 9, 11, 12, 15–20, 22–40, 45), Sch 11 (items 2–5), Sch 12 (items 16–18, 20, 25, 26): 3 July 2002 (s 2(1) items 6, 7, 9, 11, 13, 15, 16, 18, 28, 30, 33) Sch 9 (items 10, 13, 14, 21) and Sch 12 (items 23, 24): 1 July 1997 (s 2(1) items 10, 12, 14, 32) Sch 12 (item 19): 30 June 1998 (s 2(1) item 29) Sch 12 (items 21, 22): 22 June 1998 (s 2(1) item 31) Sch 12 (items 27, 28): 16 Apr 1998 (s 2(1) item 34) Sch 12 (item 29): 19 Sept 1997 (s 2(1) item 35)

s 112-95 — Transfer of tax losses and net capital losses within wholly ‑ owned groups of companies

Transfer of tax losses and net capital losses within wholly ‑ owned groups of companies Item In this situation: Element affected: See section: 1 An amount of a tax loss is transferred and a company has a direct or indirect equity interest in the loss company The total cost base and reduced cost base 170 ‑ 210 2 An amount of a tax loss is transferred and a company has a direct or indirect debt interest in the loss company The reduced cost base 170 ‑ 210 3 An amount of a tax loss is transferred and a company has a direct or indirect equity or debt interest in the income company The total cost base and reduced cost base 170 ‑ 215 4 An amount of a net capital loss is transferred and a company has a direct or indirect equity interest in the loss company The total cost base and reduced cost base 170 ‑ 220 5 An amount of a net capital loss is transferred and a company has a direct or indirect debt interest in the loss company The reduced cost base 170 ‑ 220 6 An amount of a net capital loss is transferred and a company has a direct or indirect equity or debt interest in the gain company The total cost base and reduced cost base 170 ‑ 225

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)) | Repealed and substituted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 112-97 — Modifications outside this Part and Part 3 ‑ 3

This table sets out other cost base modifications outside this Part and Part 3 ‑ 3. Provisions of the Income Tax Assessment Act 1936 are in bold . Modifications outside this Part and Part 3 ‑ 3 Item In this situation Element affected: See: 1A You receive, under a * farm ‑ in farm ‑ out arrangement, an * exploration benefit or an entitlement to an exploration benefit First element of cost base and reduced cost base Section 40 ‑ 1120 1 You stop holding an item as trading stock First element of cost base and reduced cost base Paragraph 70 ‑ 110(1)(b) 2 CGT event happens to Cocos (Keeling) Islands asset First element of cost base and reduced cost base subsection 102 ‑ 25(1) of the Income Tax (Transitional Provisions) Act 1997 2A Lender acquires a replacement security First element of cost base and reduced cost base subsection 26BC(6B) 3 CGT event happens by the borrower disposing of the borrowed security to a third party First element of cost base and reduced cost base paragraph 26BC(9)(a) 4 CGT event happens to replacement security and compensatory payment was incurred by the borrower Second element of cost base and reduced cost base subsection 26BC(9A) 5 CGT event happens to CGT asset in connection with the demutualisation of an insurance company except a friendly society health or life insurer First element of cost base and reduced cost base section 121AS 5A CGT event happens to CGT asset in connection with the demutualisation of a mutual entity other than an insurance company, health insurer and friendly society health or life insurer First element of cost base and reduced cost base Division 326 in Schedule 2H 6 CGT event happens to assets of NSW State Bank First element of cost base and reduced cost base section 121EN 7 Trust ceases to be a resident trust for CGT purposes and there is an attributable taxpayer The total cost base and reduced cost base section 102AAZBA 8 You own shares in a company that stops being a PDF First element of cost base and reduced cost base section 124ZR 10 CGT event happens to CGT asset used in gold mining First element of cost base and reduced cost base section 112 ‑ 100 of the Income Tax (Transitional Provisions) Act 1997 12 Shares in a holding company are cancelled The total cost base and reduced cost base section 159GZZZH 12B Entity has interest in loss company immediately before alteration time The total reduced cost base sections 165 ‑ 115ZA and 165 ‑ 115ZB 13 CGT event happens to 30 June 1988 asset of a complying superannuation entity First element of cost base and reduced cost base section 295 ‑ 85 of the Income Tax (Transitional Provisions) Act 1997 14 CGT event happens to CGT asset of a complying superannuation entity First element of cost base and reduced cost base section 295 ‑ 100 of the Income Tax (Transitional Provisions) Act 1997 15 A CGT asset of a CFC is taken into account in calculating its attributable income First element of cost base and reduced cost base section 412 16 A CGT asset of a CFC is taken into account in calculating its attributable income First element of cost base and reduced cost base subsection 413(2) 17 A CGT asset of a CFC is taken into account in calculating its attributable income First element of cost base and reduced cost base subsection 413(3) 18 A CGT asset of a CFC is taken into account in calculating its attributable income First element of cost base and reduced cost base section 414 18A You cease to hold a registered emissions unit as the result of an outgoing international transfer of a Kyoto unit First element of cost base and reduced cost base Section 420 ‑ 35 19 A commercial debt is forgiven The total cost base and reduced cost base of certain CGT assets of the debtor sections 245 ‑ 175 to 245 ‑ 190 20 A tax exempt entity becomes taxable First element of cost base and reduced cost base section 57 ‑ 25 in Schedule 2D 20A An entity becomes or ceases to be a foreign hybrid The total cost base and reduced cost base Sections 830 ‑ 80 and 830 ‑ 85 21 A CGT asset is transferred to or from a life insurance company’s complying superannuation asset pool First element of cost base and reduced cost base subsection 320 ‑ 200(2) 22 A CGT asset is transferred to or from the segregated exempt assets of a life insurance company First element of cost base and reduced cost base subsection 320 ‑ 255(2) 22A A CGT event happens in relation to forestry interest in a forestry managed investment scheme for a subsequent participant The total cost base and reduced cost base Subsection 394 ‑ 30(9) 22B You start or cease to have a * Division 230 financial arrangement as consideration for the acquisition of a thing All elements of cost base and reduced cost base section 230 ‑ 505 23 The arrangement period for the tax preferred use of an asset ends The total cost base and reduced cost base subsection 250 ‑ 285(3) 24 An entity becomes a subsidiary member of a consolidated group The total cost base and reduced cost base for the head company of the subsidiary’s assets Section 701 ‑ 10 24A An entity ceases to be a subsidiary member of a consolidated group The total cost base and reduced cost base for the head company of membership interests in the subsidiary Section 701 ‑ 15 24B An entity ceases to be a subsidiary member of a consolidated group The total cost base and reduced cost base for the head company of liabilities owed by the subsidiary Section 701 ‑ 20 24C An entity ceases to be a subsidiary member of a consolidated group and an asset becomes an asset of the entity because the single entity rule ceases to apply The total cost base and reduced cost base for the entity of a liability owed to the entity Section 701 ‑ 45 24D 2 or more entities cease to be subsidiary members of a consolidated group The total cost base and reduced cost base of the membership interests that one subsidiary member holds in another Section 701 ‑ 50 24E Determining an asset’s tax cost setting amount The total cost base and reduced cost base of the asset Section 701 ‑ 55 24F Eligible tier ‑ 1 company ceases to be a subsidiary member of a MEC group or a CGT event happens to a pooled interest in the company The total cost base and reduced cost base Section 719 ‑ 565 25 You make a forex realisation gain as a result of forex realisation event 4, and: (a) you incurred the obligation to pay foreign currency: (i) in return for the acquisition of a CGT asset; or (ii) as the second, third, fourth or fifth element of the cost base of a CGT asset; and (b) the foreign currency became due for payment within 12 months after the time when: (i) in the case of the acquisition of a CGT asset—you acquired the CGT asset; or (ii) in the case of the second, third, fourth or fifth element of the cost base of a CGT asset—you incurred the relevant expenditure total cost base and reduced cost base section 775 ‑ 70 26 You make a forex realisation loss as a result of forex realisation event 4, and: (a) you incurred the obligation to pay foreign currency: (i) in return for the acquisition of a CGT asset; or (ii) as the second, third, fourth or fifth element of the cost base of a CGT asset; and (b) the foreign currency became due for payment within 12 months after the time when: (i) in the case of the acquisition of a CGT asset—you acquired the CGT asset; or (ii) in the case of the second, third, fourth or fifth element of the cost base of a CGT asset—you incurred the relevant expenditure total cost base and reduced cost base section 775 ‑ 75 27 You acquire foreign currency as a result of forex realisation event 2 first element of cost base and reduced cost base section 775 ‑ 125 28 On 10 May 2005, a foreign resident holds certain membership interests first element of * cost base and * reduced cost base subsection 855 ‑ 25(3) 29 You are issued with an asset under a demutualisation of a health insurer except a friendly society health or life insurer First element of cost base and reduced cost base sections 315 ‑ 80, 315 ‑ 210 and 315 ‑ 260 30 You are transferred an asset by a lost policy holders trust under a demutualisation of a health insurer except a friendly society health or life insurer First element of cost base and reduced cost base sections 315 ‑ 145, 315 ‑ 210 and 315 ‑ 260 30A A CGT event occurs under a demutualisation of a friendly society health or life insurer and the capital proceeds from the event include money All elements of cost base section 316 ‑ 60 30B You are issued with an asset under a demutualisation of a friendly society health or life insurer First element of cost base and reduced cost base section 316 ‑ 105 30C A CGT event happens to an interest in a lost policy holders trust and the capital proceeds from the event include money All elements of cost base section 316 ‑ 165 30D You are transferred a share, or right to acquire shares, by a lost policy holders trust under a demutualisation of a friendly society health or life insurer The total cost base and reduced cost base section 316 ‑ 170 31 An entitlement arises under Division 2AA of Part II of the Banking Act 1959 in connection with an account ‑ holder’s account with an ADI The total cost base, and reduced cost base, of the entitlement and of the remainder (if any) of the right to be paid by the ADI in connection with the account Section 253 ‑ 15 32 You acquire an * ESS interest and Subdivision 83A ‑ B or 83A ‑ C (about employee share schemes) applies to the interest First element of cost base and reduced cost base sections 83A ‑ 30 and 83A ‑ 125 33 An entity chooses a roll ‑ over under Subdivision 310 ‑ D and the entity chooses section 310 ‑ 55 to apply to assets First element of cost base and reduced cost base section 310 ‑ 55 34 An entity chooses a roll ‑ over under Subdivision 310 ‑ D, but the entity does not choose section 310 ‑ 55 to apply to assets First element of cost base and reduced cost base section 310 ‑ 60 35 A CGT asset is held by a company that has ownership not significantly different from that of a former body that held the asset and was incorporated under another law First element of cost base and reduced cost base Section 620 ‑ 25 37 The issuing of a share gives rise to an entitlement to a tax offset under Subdivision 360 ‑ A First element of cost base and reduced cost base Sections 360 ‑ 50, 360 ‑ 55, 360 ‑ 60 and 360 ‑ 65

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 103 of 1999, effective 16 July 1999 | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | 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 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 133 of 2003, effective 17 Dec 2003 | 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 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 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 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 168 of 2006, effective Schedule 3 (items 3–5): 13 Dec 2005 Remainder: Royal Assent | 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 79 of 2007, effective Schedule 1 (items 28, 29, 39–42, 43(1), (6)), Schedules 3, 4, Schedule 6 (items 3–8), Schedule 9 (items 14–26, 30, 34) and Schedule 10 (items 10–13, 32): Royal Assent Schedule 8 (items 2, 12–25, 26(1)–(3)): 1 July 2007 | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 45 of 2008, effective 26 June 2008 | 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 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) | 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 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 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 19 of 2010, effective Sch 1 (items 1–13, 16–20), Sch 3 (items 11, 12), Sch 4 (items 3–6) and Sch 5 (item 6): 24 Mar 2010 (s 2(1) items 2, 9, 11, 14) Sch 2 (items 1–11): 25 Mar 2010 (s 2(1) item 3) Sch 2 (items 12–26):repealed before commencing (s 2(1) item 4) Sch 3 (items 1, 2): 30 June 2000 (s 2(1) item 5) Sch 3 (items 4–8): 15 Mar 2007 (s 2(1) item 7) Sch 4 (items 1, 2): 4 June 2009 (s 2(1) item 10) Sch 5 (items 2, 3): 25 Feb 2009 (s 2(1) item 12) Sch 5 (items 4, 5): 1 July 2011 (s 2(1) item 13) | 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) | Amended by No 79 of 2010, effective Sch 1 (items 3–5, 27–32), Sch 2 (items 2–8, 17–45), Sch 3 (items 2–59), Sch 4 (items 2–6, 38–46, 51) and Sch 5 (items 2, 6–13): 1 July 2010 (s 2(1) items 2–4) | 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 132 of 2011, effective Sch 2 (items 4–71): 2 Apr 2012 (s 2(1) item 5) Sch 2 (items 74–77): never commenced (s 2(1) item 6 (rep by 83, 2014, Sch 3 item 1)) | 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) | Amended by No 89 of 2013, effective Sch 1 (items 1–13): 28 June 2013 (s 2(1) items 2–5) Sch 1 (items 14–25): 2 July 2019 (s 2(1) items 6–8) | Amended by No 83 of 2014, effective Sch 1 (items 156–195, 336): 1 July 2014 (s 2(1) items 2, 3) Sch 3 (items 3–7): 18 July 2014 (s 2(1) item 7) | Amended by No 53 of 2015, effective Sch 1 (items 9–17, 19): 1 July 2016 (s 2) | Amended by No 70 of 2015, effective Sch 1 (items 65–108, 188–192, 195–205): 1 July 2015 (s 2(1) items 3, 4, 6) Sch 2 (items 17, 24–29, 34–39), Sch 6 (items 13–30, 32–38) and Sch 7 (items 1, 5–11): 25 June 2015 (s 2(1) items 7, 11, 13, 20) Sch 4 (items 1, 2) and Sch 5 (item 1): 26 June 2015 (s 2(1) items 7A, 8) Sch 4 (items 3, 4): 1 July 2025 (s 2(1) item 7B) Sch 6 (item 31): 29 June 2013 (s 2(1) item 12) The commencement date for amendments made by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 Sch 4 (items 1, 2) was retrospectively changed from 25 June 2015 to 26 June 2015 | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5) | Amended by No 20 of 2016, effective Sch 1 (items 1, 2): 1 July 2016 (s 2(1) item 2) | Amended by No 54 of 2016, effective Sch 1 (items 1, 12–14, 19) and Sch 2 (items 1–5, 8–14, 20–34, 44–51, 53–56, 63–74, 76): 1 July 2016 (s 2(1) items 2–5, 7) | Amended by No 4 of 2018, effective Sch 6 (items 9–20, 27): 21 Feb 2018 (s 2(1) item 1) | Amended by No 23 of 2018, effective Sch 1 (items 12–19, 21–23, 60–62), Sch 2 (items 1, 2, 6) and Sch 5 (items 7–11, 26–28): 1 Apr 2018 (s 2(1) items 3, 5, 8, 10, 12) Sch 1 (items 75–79): 30 Mar 2018 (s 2(1) item 9) | Amended by No 64 of 2020, effective Sch 3 (items 72–122): 1 July 2020 (s 2(1) item 5) Sch 3 (items 228–239, 325, 326): 1 Oct 2020 (s 2(1) item 6) Sch 3 (items 327–330): 1 July 2017 (s 2(1) item 7)

s 112-100 — Effect of this Subdivision

This Subdivision is a * Guide. Note: In interpreting an operative provision, a Guide may be considered only for limited purposes: see section 950 ‑ 150.

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 112-105 — What is a replacement ‑ asset roll ‑ over?

(1) A replacement ‑ asset roll ‑ over allows you to defer the making of a capital gain or a capital loss from one CGT event until a later CGT event happens. (2) It involves your ownership of one CGT asset (the original asset ) ending and you acquiring another one (the replacement asset ). (3) All replacement ‑ asset roll ‑ overs are set out in the table in section 112 ‑ 115.

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 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3)

s 112-110 — How is the cost base of the replacement asset modified?

If you acquired the original asset on or after 20 September 1985: (a) the first element of the replacement asset’s cost base is replaced by the original asset’s cost base at the time you acquired the replacement asset; and (b) the first element of the replacement asset’s reduced cost base is replaced by the original asset’s reduced cost base at the time you acquired the replacement asset. Note 1: Some replacement ‑ asset roll ‑ overs involve other rules that affect the cost base or reduced cost base of the replacement asset. Note 2: If you acquired the original asset before 20 September 1985, you are taken to have acquired the replacement asset before that day: see Subdivision 124 ‑ A. Note 3: The reduced cost base may be further modified if the replacement asset roll ‑ over happens after a demerger: see section 125 ‑ 170.

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 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3) | 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)

s 112-115 — Table of replacement ‑ asset roll ‑ overs

This table sets out all the replacement ‑ asset roll ‑ overs and tells you where you can find more detail about each one. Provisions of this Act are in normal text. The other provisions, in bold , are provisions of the Income Tax Assessment Act 1936 . Replacement ‑ asset roll ‑ overs Item For the rules about this roll ‑ over: See: 1 Disposal or creation of assets by individual or trustee to a wholly ‑ owned company sections 122 ‑ 40 to 122 ‑ 65 2 Disposal or creation of assets by partners to a wholly ‑ owned company sections 122 ‑ 150 to 122 ‑ 195 4 Asset compulsorily acquired, lost or destroyed Subdivision 124 ‑ B 5 New statutory licences Subdivision 124 ‑ C 6 Strata title conversion Subdivision 124 ‑ D 7 Exchange of shares in the same company or units in the same unit trust Subdivision 124 ‑ E 8 Exchange of rights or options to acquire shares in a company or units in a unit trust Subdivision 124 ‑ F 11 Change of incorporation Subdivision 124 ‑ I 12 Crown leases Subdivision 124 ‑ J 13 Depreciating assets Subdivision 124 ‑ K 14 Prospecting and mining entitlements Subdivision 124 ‑ L 14A Scrip for scrip Subdivision 124 ‑ M 14B Exchange of interests in a trust as a result of a trust restructure Subdivision 124 ‑ N 14BB Exchange of an interest in an MDO for an interest in another MDO Subdivision 124 ‑ P 14BC Exchange of stapled ownership interests Subdivision 124 ‑ Q 14BD Water entitlements Subdivision 124 ‑ R 14C Demergers Division 125 14D Exchange of shares in one company for shares in an interposed company Division 615 14E Exchange of units in a unit trust for shares in a company Division 615 15 Disposal of a security under a securities lending arrangement section 26BC

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 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 53 of 2002, effective Schedules 3 and 4: 1 July 2002 Remainder: Royal Assent | Amended by No 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3) | 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 143 of 2007, effective Schedule 1 (items 1, 4, 128–194, 222, 223, 225, 226), Schedule 2, Schedule 5 (items 1–16, 48(1)–(3)), Schedule 6 and Schedule 7 (items 18–68): Royal Assent Schedule 5 (items 31–46): 15 Mar 2007 (s 2(1) item 6) | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | 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 136 of 2010, effective s. 4, Schedule 2, Schedule 3 (items 95, 135–149), Schedule 4, Schedule 6 (items 2–4, 6, 7) and Schedule 7 (items 1, 2, 4): Royal Assent Sch 3 (items 3–94, 96–130): 26 Mar 2009 (s 2(1) items 3, 5) Sch 3 (item 131): 1 July 2010 (s 2(1) item 6) Sch 6 (items 1, 5): 1 Apr 2010 (s 2(1) items 11, 13) | 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) | 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 133 of 2014, effective s 4, Sch 1 (items 1, 4–29, 37–40) and Sch 2 (items 1–3, 5): 12 Dec 2014 (s 2(1) items 1, 2)

s 112-135 — Effect of this Subdivision

This Subdivision is a * Guide. Note: In interpreting an operative provision, a Guide may be considered only for limited purposes: see section 950 ‑ 150.

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 112-140 — What is a same ‑ asset roll ‑ over?

A same ‑ asset roll ‑ over allows one entity (the transferor ) to disregard a capital gain or loss it makes from disposing of a CGT asset to, or creating a CGT asset in, another entity (the transferee ). Any gain or loss is deferred until another CGT event happens in relation to the asset (in the hands of the transferee). All same ‑ asset roll ‑ overs are set out in the table in section 112 ‑ 150.

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 53 of 2002, effective Schedules 3 and 4: 1 July 2002 Remainder: Royal Assent | Amended by No 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3)

s 112-145 — How is the cost base of the asset modified?

If the transferor acquired the asset on or after 20 September 1985: (a) the first element of the asset’s cost base (in the hands of the transferee) is replaced by the asset’s cost base at the time the transferee acquired it; and (b) the first element of the asset’s reduced cost base (in the hands of the transferee) is replaced by the asset’s reduced cost base at the time the transferee acquired it. Note 1: If the transferor acquired the asset before 20 September 1985, the transferee is taken to have acquired it before that day: see Subdivision 126 ‑ A. Note 2: The reduced cost base may be further modified if the same asset roll ‑ over happens after a demerger: see section 125 ‑ 170.

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 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3) | 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)

s 112-150 — Table of same ‑ asset roll ‑ overs

This table sets out all the same ‑ asset roll ‑ overs and tells you where you can find more detail about each one. Same ‑ asset roll ‑ overs Item For the rules about this roll ‑ over: See: 1 Transfer of a CGT asset from one spouse to the other because of a marriage or relationship breakdown Subdivision 126 ‑ A 2 Transfer of a CGT asset from a company or trust to a spouse because of a marriage or relationship breakdown Subdivision 126 ‑ A 3 Transfer of a CGT asset to a wholly ‑ owned company sections 122 ‑ 70 and 122 ‑ 75 4 Transfer of a CGT asset of a partnership to a wholly ‑ owned company Sections 122 ‑ 200 and 122 ‑ 205 4A Transfer of a CGT asset of a trust to a company under a trust restructure Subdivision 124 ‑ N 5 Transfer of a CGT asset between certain related companies Subdivision 126 ‑ B 6 CGT event happens because a trust deed of a complying approved deposit fund, a complying superannuation fund or a fund that accepts worker entitlement contributions is changed Subdivision 126 ‑ C 7 Transfer of a CGT asset from a small superannuation fund to another complying superannuation fund because of a marriage or relationship breakdown Subdivision 126 ‑ D 8 Beneficiary becomes absolutely entitled to a share following a roll ‑ over under Subdivision 124 ‑ M Subdivision 126 ‑ E 10 Transfer of a CGT asset between certain trusts Subdivision 126 ‑ G 11 Corporations covered by Subdivision 124 ‑ I sections 620 ‑ 10, 620 ‑ 15, 620 ‑ 20 and 620 ‑ 25

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 2001, effective Sch 1 (items 16–19, 21–24): 28 Dec 2002 (s 2) | Amended by No 53 of 2002, effective Schedules 3 and 4: 1 July 2002 Remainder: Royal Assent | Amended by No 57 of 2002, effective Sch 2: 1 July 2002 (s 2(1) item 3) Sch 4 (items 3, 4): 1 July 2000 (s 2(1) item 5) Sch 4 (items 5–8), Sch 7, Sch 9 (items 9, 11, 12, 15–20, 22–40, 45), Sch 11 (items 2–5), Sch 12 (items 16–18, 20, 25, 26): 3 July 2002 (s 2(1) items 6, 7, 9, 11, 13, 15, 16, 18, 28, 30, 33) Sch 9 (items 10, 13, 14, 21) and Sch 12 (items 23, 24): 1 July 1997 (s 2(1) items 10, 12, 14, 32) Sch 12 (item 19): 30 June 1998 (s 2(1) item 29) Sch 12 (items 21, 22): 22 June 1998 (s 2(1) item 31) Sch 12 (items 27, 28): 16 Apr 1998 (s 2(1) item 34) Sch 12 (item 29): 19 Sept 1997 (s 2(1) item 35) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | 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 78 of 2005, effective 29 June 2005 | 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 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008 | Amended by No 19 of 2010, effective Sch 1 (items 1–13, 16–20), Sch 3 (items 11, 12), Sch 4 (items 3–6) and Sch 5 (item 6): 24 Mar 2010 (s 2(1) items 2, 9, 11, 14) Sch 2 (items 1–11): 25 Mar 2010 (s 2(1) item 3) Sch 2 (items 12–26):repealed before commencing (s 2(1) item 4) Sch 3 (items 1, 2): 30 June 2000 (s 2(1) item 5) Sch 3 (items 4–8): 15 Mar 2007 (s 2(1) item 7) Sch 4 (items 1, 2): 4 June 2009 (s 2(1) item 10) Sch 5 (items 2, 3): 25 Feb 2009 (s 2(1) item 12) Sch 5 (items 4, 5): 1 July 2011 (s 2(1) item 13) | 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) | Amended by No 109 of 2014, effective Sch 10 (items 13–15, 21–48): 17 Oct 2014 (s 2(1) item 8)

s 112-155 — Australian resident individuals—deemed sale just before, and reacquisition on, 1 July 2027

Application (1) This section applies in relation to a * CGT asset of yours if: (a) on 30 June 2027, the asset is not a * pre ‑ CGT asset; and (b) you are an individual who * acquired the asset and then held it throughout the period: (i) starting at a time before 1 July 2027; and (ii) ending at the end of 30 June 2027; and (c) you continue to hold the asset until a * realisation event happens in relation to the asset on or after 1 July 2027; and (d) if it were assumed that you make a * discount capital gain from the realisation event—section 115 ‑ 105 (about foreign or temporary residents) would not apply to the discount capital gain; and (e) the asset is not an asset for which either of the following sections applies in relation to a * capital gain you make in relation to the realisation event: (i) section 115 ‑ 102 (about new residential dwellings); (ii) section 115 ‑ 125 (about affordable housing). Deemed sale and reacquisition (2) For the purposes of this Part, Part 3 ‑ 3 and Subdivision 960 ‑ M, you are taken: (a) to have sold the asset just before 1 July 2027, with your * capital proceeds for that sale taken to be the amount applying under subsection (3); and (b) to have * acquired the asset again just after that sale for an amount equal to those capital proceeds. Note 1: The sale under paragraph (a) happens on 30 June 2027, and the reacquisition under paragraph (b) happens on 1 July 2027. Note 2: Any capital gain or loss you make from the sale on 30 June 2027 is disregarded (and deferred) until the income year in which the realisation event happens. You can wait until then before working out the amount of the capital gain or loss (see section 112 ‑ 160). Note 3: Subdivision 960 ‑ M deals with indexation of a CGT asset’s cost base. (3) The * capital proceeds are taken to be equal to: (a) unless paragraph (b) applies—the asset’s * market value just before 1 July 2027; or (b) if you choose to use an apportioning method determined under section 112 ‑ 185—the amount of capital proceeds worked out using that method. (4) For the purposes of paragraph 103 ‑ 25(1)(a), the * realisation event is the relevant * CGT event for such a choice. Note 1: Section 103 ‑ 25 sets out rules for making choices. Note 2: This subsection and section 103 ‑ 25 mean you do not have to make a choice until the day you lodge your income tax return for the income year in which the realisation event happens (see paragraph 103 ‑ 25(1)(a)). Note 3: The realisation event is the event mentioned in paragraph (1)(c). (5) Except for the purposes of section 112 ‑ 185 (about making apportioning determinations), none of the following apply in relation to a sale and acquisition mentioned in paragraphs (2)(a) and (b) for which a choice is made under paragraph (3)(b): (a) Subdivisions 112 ‑ A, 112 ‑ B, 112 ‑ C and 112 ‑ D (about modifications of the cost base and reduced cost base); (b) sections 116 ‑ 25 to 116 ‑ 60 (about modifications of the general rules about capital proceeds).

Amendment history: Inserted 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 112-160 — Australian resident individuals—defer a gain or loss from the deemed sale until the later realisation event happens

Application (1) This section applies in relation to a * CGT asset of yours if, under paragraph 112 ‑ 155(2)(a), you make: (a) a * capital gain (the initial notional gain ); or (b) a * capital loss (the initial notional loss ); in respect of the asset (disregarding subsection (2) of this section). Note: The initial notional gain or loss is made from the sale that is taken to happen at the end of 30 June 2027 (see paragraph 112 ‑ 155(2)(a)), and is disregarded under subsection (2) of this section. Disregard the initial notional gain or loss because it is to be deferred (2) Disregard the initial notional gain or the initial notional loss, except for the purposes of subsection (3) or (4). Deferring an initial notional gain (3) If you made an initial notional gain, then for the purposes of Division 102: (a) in the income year in which the * realisation event happens in relation to the * CGT asset—you are treated as having made a * capital gain ( your deferred gain ): (i) for the * CGT event that happens under paragraph 112 ‑ 155(2)(a) (the deemed CGT event ); and (ii) that is a * discount capital gain if the initial notional gain is a discount capital gain; and (iii) that is equal to the amount of the initial notional gain; and (b) disregard section 102 ‑ 20 in relation to your deferred gain; and (c) for the purposes of subparagraph (a)(ii) of this subsection, in working out whether the initial notional gain is a discount capital gain, treat the deemed CGT event as if it happens on the day the realisation event happens; and (d) in working out whether, under step 6 of the method statement in subsection 102 ‑ 5(1), your deferred gain qualifies for any of the small business concessions, treat the deemed CGT event as if it happens on the day the realisation event happens. Note 1: For paragraph (a), the realisation event is the CGT event referred to in paragraph 112 ‑ 155(1)(c). Note 2: Paragraph (c) is relevant for working out whether the 12 ‑ month rule in subsection 115 ‑ 25(1) is satisfied for the initial notional gain. Note 3: If the initial notional gain is a discount capital gain, then under step 5 of the method statement in subsection 102 ‑ 5(1), the 50% discount mentioned in paragraph 115 ‑ 100(aa) can apply to your deferred gain. Deferring an initial notional loss (4) If you made an initial notional loss, then for the purposes of Division 102: (a) in the income year in which the * realisation event happens in relation to the * CGT asset—you are treated as having made a * capital loss ( your deferred loss ) equal to the amount of the initial notional loss; and (b) disregard section 102 ‑ 20 in relation to your deferred loss. Note: You may make a separate capital loss from the realisation event for the period starting on 1 July 2027. In working out whether you make a capital loss from the realisation event for this period, you are taken to have acquired the CGT asset at the time, and for the amount, mentioned in paragraph 112 ‑ 155(2)(b). Working out whether concessions are available for a capital gain from the realisation event (5) In working out when you * acquired the * CGT asset for the purposes of working out whether your * capital gain resulting from the * realisation event is a * discount capital gain, disregard the sale and acquisition under subsection 112 ‑ 155(2). Note: If you make a capital gain from the realisation event in respect of the asset, this subsection is relevant for working out whether the 12 ‑ month rule in subsection 115 ‑ 25(1) is satisfied for the capital gain. (6) In working out whether, under step 6 of the method statement in subsection 102 ‑ 5(1), your * capital gain resulting from the * realisation event qualifies for any of the small business concessions, disregard the sale and acquisition under subsection 112 ‑ 155(2). Note: Subsections (5) and (6) refer to the capital gain from the realisation event for the period starting on 1 July 2027. The sale and reacquisition under subsection 112 ‑ 155(2) remain relevant for working out the amount of this capital gain, just not for whether this capital gain: (a) is a discount capital gain; or (b) qualifies for any of the small business concessions.

Amendment history: Inserted 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 112-165 — Trusts—deemed sale just before, and reacquisition on, 1 July 2027

Application (1) This section applies in relation to a * CGT asset of a trust estate if: (a) on 30 June 2027, the asset is not a * pre ‑ CGT asset; and (b) the trustee * acquired the asset and then held it throughout the period: (i) starting at a time before 1 July 2027; and (ii) ending at the end of 30 June 2027; and (c) the trustee continues to hold the asset until a * realisation event happens in relation to the asset on or after 1 July 2027; and (d) if it were assumed that the trust estate makes a * discount capital gain (the primary trust gain ) from the realisation event—at least one beneficiary of the trust makes, because of section 115 ‑ 215, a discount capital gain in relation to the primary trust gain for which: (i) for a beneficiary who is an individual—section 115 ‑ 110 (about foreign or temporary residents) does not apply; or (ii) for a beneficiary that is another trust (other than a * complying superannuation entity)—section 115 ‑ 120 (about foreign or temporary residents) does not apply; and (e) the asset is not an asset for which either: (i) section 115 ‑ 102 (about new residential dwellings); or (ii) section 115 ‑ 125 (about affordable housing); applies in relation to all of the * capital gains that, because of section 115 ‑ 215, are made by the beneficiaries of the trust in relation to the capital gain the trust estate makes in relation to the realisation event. Deemed sale and reacquisition (2) For the purposes of this Part, Part 3 ‑ 3 and Subdivision 960 ‑ M, the trustee is taken: (a) to have sold the asset just before 1 July 2027, with the trustee’s * capital proceeds for that sale taken to be the amount applying under subsection (3); and (b) to have * acquired the asset again just after that sale for an amount equal to those capital proceeds. Note 1: The sale under paragraph (a) happens on 30 June 2027, and the reacquisition under paragraph (b) happens on 1 July 2027. Note 2: Any capital gain or loss the trust estate makes from the sale on 30 June 2027 is disregarded (and deferred) until the income year in which the realisation event happens. The trustee (and beneficiaries) can wait until then before working out the amount of the capital gain or loss (see section 112 ‑ 170). Note 3: Subdivision 960 ‑ M deals with indexation of a CGT asset’s cost base. (3) The * capital proceeds are taken to be equal to: (a) unless paragraph (b) applies—the asset’s * market value just before 1 July 2027; or (b) if the trustee chooses to use an apportioning method determined under section 112 ‑ 185—the amount of capital proceeds worked out using that method. (4) For the purposes of paragraph 103 ‑ 25(1)(a), the * realisation event is the relevant * CGT event for such a choice. Note 1: Section 103 ‑ 25 sets out rules for making choices. Note 2: This subsection and section 103 ‑ 25 mean the trustee does not have to make a choice until the day the trustee lodges the trust’s income tax return for the income year in which the realisation event happens (see paragraph 103 ‑ 25(1)(a)). Note 3: The realisation event is the event mentioned in paragraph (1)(c). (5) Except for the purposes of section 112 ‑ 185 (about making apportioning determinations), none of the following apply in relation to a sale and acquisition mentioned in paragraphs (2)(a) and (b) for which a choice is made under paragraph (3)(b): (a) Subdivisions 112 ‑ A, 112 ‑ B, 112 ‑ C and 112 ‑ D (about modifications of the cost base and reduced cost base); (b) sections 116 ‑ 25 to 116 ‑ 60 (about modifications of the general rules about capital proceeds). (6) To avoid doubt, subsection (2) applies only for the purposes of the provisions mentioned in that subsection. For example, it does not apply for the purposes of Subdivision EA of Division 7A of Part III of the Income Tax Assessment Act 1936 (about unpaid present entitlements).

Amendment history: Inserted 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 112-170 — Trusts—defer a gain or loss from the deemed sale until the later realisation event happens

Application (1) This section applies in relation to a * CGT asset of a trust estate if, under paragraph 112 ‑ 165(2)(a), the trust estate makes: (a) a * capital gain (the initial notional gain ); or (b) a * capital loss (the initial notional loss ); in respect of the asset (disregarding subsection (2) of this section). Note: The initial notional gain or loss is made from the sale that is taken to happen at the end of 30 June 2027 (see paragraph 112 ‑ 165(2)(a)), and is disregarded under subsection (2) of this section. Disregard the initial notional gain or loss because it is to be deferred (2) Disregard the initial notional gain or the initial notional loss, except for the purposes of subsection (3) or (4). Deferring an initial notional gain (3) If the trust estate made an initial notional gain, then for the purposes of Division 102 and Subdivision 115 ‑ C: (a) in the income year in which the * realisation event happens in relation to the * CGT asset—treat the trust estate as having made a * capital gain (the trust’s deferred gain ): (i) for the * CGT event that happens under paragraph 112 ‑ 165(2)(a) (the deemed CGT event ); and (ii) that is a * discount capital gain if the initial notional gain is a discount capital gain; and (iii) that is equal to the amount of the initial notional gain; and (b) disregard section 102 ‑ 20 in relation to the trust’s deferred gain; and (c) for the purposes of subparagraph (a)(ii) of this subsection, in working out whether the initial notional gain is a discount capital gain, treat the deemed CGT event as if it happens on the day the realisation event happens; and (d) in working out whether, under step 6 of the method statement in subsection 102 ‑ 5(1), the trust’s deferred gain qualifies for any of the small business concessions, treat the deemed CGT event as if it happens on the day the realisation event happens. Note 1: For paragraph (a), the realisation event is the CGT event referred to in paragraph 112 ‑ 165(1)(c). Note 2: Paragraph (c) is relevant for working out whether the 12 ‑ month rule in subsection 115 ‑ 25(1) is satisfied for the initial notional gain. Note 3: If the initial notional gain is a discount capital gain, then under step 5 of the method statement in subsection 102 ‑ 5(1), the 50% discount mentioned in paragraph 115 ‑ 100(ab) can apply to the trust’s deferred gain. Note 4: A beneficiary of the trust may also be taken to have made, because of section 115 ‑ 215, a capital gain in relation to the trust’s deferred gain. Deferring an initial notional loss (4) If the trust estate made an initial notional loss, then for the purposes of Division 102: (a) in the income year in which the * realisation event happens in relation to the * CGT asset—treat the trust estate as having made a * capital loss (the trust’s deferred loss ) equal to the amount of the initial notional loss; and (b) disregard section 102 ‑ 20 in relation to the trust’s deferred loss. Note 1: For paragraph (a), the realisation event is the CGT event referred to in paragraph 112 ‑ 165(1)(c). Note 2: The trust estate may make a separate capital loss from the realisation event for the period starting on 1 July 2027. In working out whether the trust estate makes a capital loss from the realisation event for this period, the trust estate is taken to have acquired the CGT asset at the time, and for the amount, mentioned in paragraph 112 ‑ 165(2)(b). Note 3: The trust’s deferred loss, and any separate capital loss referred to in note 2, are taken into account to work out whether the trust estate has a net capital gain for the income year in which the realisation event happens. If the trust estate does, then a beneficiary of the trust may also be taken to have, because of section 115 ‑ 215, an extra capital gain for that income year. Working out whether concessions are available for a capital gain from the realisation event (5) In working out when the trustee * acquired the * CGT asset for the purposes of working out whether the trust estate’s * capital gain resulting from the * realisation event is a * discount capital gain, disregard the sale and acquisition under subsection 112 ‑ 165(2). Note: If the trust estate make a capital gain from the realisation event in respect of the asset, this subsection is relevant for working out whether the 12 ‑ month rule in subsection 115 ‑ 25(1) is satisfied for the capital gain. (6) In working out whether, under step 6 of the method statement in subsection 102 ‑ 5(1), the trust estate’s * capital gain resulting from the * realisation event qualifies for any of the small business concessions, disregard the sale and acquisition under subsection 112 ‑ 165(2). Note 1: Subsections (5) and (6) refer to the capital gain from the realisation event for the period starting on 1 July 2027. The sale and reacquisition under subsection 112 ‑ 165(2) remain relevant for working out the amount of this capital gain, just not for whether this capital gain: (a) is a discount capital gain; or (b) qualifies for any of the small business concessions. Note 2: A beneficiary of the trust may also be taken to have made, because of section 115 ‑ 215, a capital gain in relation to the capital gain of the trust estate referred to in subsections (5) and (6).

Amendment history: Inserted 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 112-175 — Pre ‑ CGT assets—deemed sale just before, and reacquisition on, 1 July 2027

(1) This section applies in relation to your asset if: (a) the asset is a * pre ‑ CGT asset on 30 June 2027; and (b) you continue to hold the asset until a * realisation event happens in relation to the asset on or after 1 July 2027. Deemed sale and reacquisition (2) For the purposes of this Part, Part 3 ‑ 3 and Subdivision 960 ‑ M, you are taken: (a) to have sold the asset just before 1 July 2027, with your * capital proceeds for that sale taken to be the amount applying under subsection (3); and (b) to have * acquired the asset again just after that sale for an amount equal to those capital proceeds. Note 1: This subsection causes the asset to cease to be a pre ‑ CGT asset, and for the first element of the asset’s cost base to be reset, on 1 July 2027 (see paragraph 149 ‑ 10(a) and subsection 110 ‑ 25(2)). Note 2: The sale under paragraph (a) happens on 30 June 2027, and the reacquisition under paragraph (b) happens on 1 July 2027. Note 3: Any capital gain or capital loss you make from the sale on 30 June 2027 is disregarded (see subsection 104 ‑ 10(5)). Note 4: For the purposes of working out whether you make a capital gain or capital loss from the realisation event, you are taken to have acquired the CGT asset at the time, and for the amount, applying under paragraph (b). Note 5: Subdivision 960 ‑ M deals with indexation of a CGT asset’s cost base. (3) The * capital proceeds are taken to be equal to: (a) unless paragraph (b) applies—the asset’s * market value immediately before 1 July 2027; or (b) if you choose to use an apportioning method determined under section 112 ‑ 185—the amount of capital proceeds worked out using that method. (4) For the purposes of paragraph 103 ‑ 25(1)(a), the * realisation event is the relevant * CGT event for such a choice. Note 1: Section 103 ‑ 25 sets out rules for making choices. Note 2: This subsection and section 103 ‑ 25 mean you do not have to make a choice until the day you lodge your income tax return for the income year in which the realisation event happens (see paragraph 103 ‑ 25(1)(a)). (5) Except for the purposes of section 112 ‑ 185 (about making apportioning determinations), none of the following apply in relation to a sale and acquisition mentioned in paragraphs (2)(a) and (b) for which a choice is made under paragraph (3)(b): (a) Subdivisions 112 ‑ A, 112 ‑ B, 112 ‑ C and 112 ‑ D (about modifications of the cost base and reduced cost base); (b) sections 116 ‑ 25 to 116 ‑ 60 (about modifications of the general rules about capital proceeds). (6) To avoid doubt, subsection (2) applies only for the purposes of the provisions mentioned in that subsection. For example, it does not apply for the purposes of Subdivision EA of Division 7A of Part III of the Income Tax Assessment Act 1936 (about unpaid present entitlements).

Amendment history: Inserted 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 112-180 — Pre ‑ CGT assets—defer a gain from CGT event K6 from the deemed sale until the later realisation event happens

Application (1) This section applies if: (a) you own * shares in a company or an interest in a trust; and (b) under subsection 112 ‑ 175(2), you are taken to have sold the shares or interest (the deemed sale ) and acquired them again; and (c) * CGT event K6 happens on 30 June 2027 as a result of the deemed sale, and you make a * capital gain from this CGT event (the initial notional gain ); and (d) you continue to hold the shares or interest until a * realisation event happens in relation to them on or after 1 July 2027. Disregard the initial notional gain because it is to be deferred (2) Disregard the initial notional gain, except for the purposes of subsection (3). Deferring an initial notional gain (3) For the purposes of Division 102: (a) in the income year in which the * realisation event happens in relation to the * CGT asset—you are treated as having made a * capital gain ( your deferred gain ): (i) for the * CGT event K6 mentioned in paragraph (1)(c); and (ii) that is a * discount capital gain if the initial notional gain is a discount capital gain; and (iii) that is equal to the amount of the initial notional gain; and (b) disregard section 102 ‑ 20 in relation to your deferred gain. Note 1: If the initial notional gain is a discount capital gain, then under step 5 of the method statement in subsection 102 ‑ 5(1), the 50% discount mentioned in paragraph 115 ‑ 100(aa) or (ab) can apply to your deferred gain. Note 2: For a trust, a beneficiary of the trust may also be taken to have made, because of section 115 ‑ 215, a capital gain in relation to the deferred gain.

Amendment history: Inserted 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 112-185 — Method for apportioning capital gains and losses between realisation events and earlier deemed CGT events

(1) The Minister may, by legislative instrument, determine a method for apportioning * capital gains and * capital losses between: (a) * realisation events happening on or after 1 July 2027 in relation to * CGT assets; and (b) earlier * CGT events relating to those CGT assets that are taken to have happened under subsection 112 ‑ 155(2), 112 ‑ 165(2) or 112 ‑ 175(2). (2) For such a * CGT asset, such a method must take into account: (a) the * acquisition of the * CGT asset that is taken to have happened under paragraph 112 ‑ 155(2)(b), 112 ‑ 165(2)(b) or 112 ‑ 175(2)(b); and (b) any expenditure (including indexation) in an element of the * cost base or * reduced cost base of the CGT asset on or after 1 July 2027; and (c) any other matter the Minister considers relevant. (3) For such a * CGT asset, such a method must enable the following to be worked out: (a) the * capital proceeds for the sale of the CGT asset that is taken to have happened under paragraph 112 ‑ 155(2)(a), 112 ‑ 165(2)(a) or 112 ‑ 175(2)(a); (b) the * cost base and * reduced cost base of the CGT asset when it is taken to have been * acquired under paragraph 112 ‑ 155(2)(b), 112 ‑ 165(2)(b) or 112 ‑ 175(2)(b). The method may also enable other things to be worked out.

Amendment history: Inserted 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 114-30 — Asset requirements for indexation to apply for a cost base worked out under subsection 110 ‑ 36(1A)

(1) This section sets out requirements for indexation to be included under subsection 110 ‑ 36(1A) in the * cost base of a * CGT asset for the purposes of working out your * capital gain from a * CGT event happening in relation to the CGT asset if: (a) you are an individual; and (b) you make the capital gain directly or, because of section 115 ‑ 215, as a beneficiary of a trust. (2) The * CGT asset must not be an asset for which either of the following sections applies in relation to the * capital gain: (a) section 115 ‑ 102 (about new residential dwellings); (b) section 115 ‑ 125 (about affordable housing). Note 1: If you are a beneficiary of a trust, the requirements in this section do not affect whether indexation is included in the cost base of the CGT asset for the purposes of working out whether the trust estate makes a capital gain. If section 115 ‑ 102 or 115 ‑ 125 (the discount section ) applies for your capital gain, then in working out your capital gain: (a) the cost base will be adjusted to remove the effect of indexation (see subsection 115 ‑ 225(5)); and (b) instead, the discount relating to the discount section applies (see paragraph 115 ‑ 215(4)(a)). Note 2: However, the result in paragraphs (a) and (b) of note 1 does not happen for your capital gain if the trust chooses under the discount section for that section not to apply. If the trust makes this choice, the indexation included in the cost base of the CGT asset will flow through to working out your capital gain (see subsection 115 ‑ 215(3)(a)).

Amendment history: Inserted 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 114-1 — Indexing elements of cost base

(1) In working out the * cost base of a * CGT asset under subsection 110 ‑ 36(1A), index expenditure incurred in each element (except the third element). Note 1: The expenditure can include giving property (see section 103 ‑ 5). Note 2: Subdivision 960 ‑ M shows you how to index amounts (see subsections 960 ‑ 275(1B) and (1C) in particular). Note 3: You have to work out the cost base of a CGT asset if a CGT event happens in relation to it or if there is a cost base modification. Note 4: You cannot index expenditure in the third element (costs of ownership) (see subsection 960 ‑ 275(4)). (2) In working out the * cost base of a * CGT asset under subsection 110 ‑ 36(1), index expenditure incurred in each element (except the third element) at or before the time mentioned in paragraph 110 ‑ 36(1)(a). Note 1: The expenditure can include giving property (see section 103 ‑ 5). Note 2: Subdivision 960 ‑ M shows you how to index amounts. Indexation under subsection 110 ‑ 36(1) does not take account of inflation after 30 September 1999 (see subsections 960 ‑ 275(2) and (3)). Note 3: You have to work out the cost base of a CGT asset if a CGT event happens in relation to it or if there is a cost base modification. Note 4: You cannot index expenditure in the third element (costs of ownership) (see subsection 960 ‑ 275(4)). Note 5: Indexation under subsection 110 ‑ 36(1) is not relevant to expenditure incurred after 11.45 am on 21 September 1999 or any expenditure relating to a CGT asset acquired after that 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 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 32 of 2006, effective 6 Apr 2006 | Repealed and substituted 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 114-5 — When indexation relevant

(1) Indexation is only relevant if the * cost base of a * CGT asset is relevant to a * CGT event. Note 1: The table in section 110 ‑ 10 sets out the CGT events for which cost base is not relevant. Note 2: Indexation is not relevant to the reduced cost base of a CGT asset. Indexation for some entities only if indexation chosen (2) Indexation is not relevant for the purposes of working out under subsection 110 ‑ 36(1): (a) the * cost base of a * CGT asset; and (b) the * capital gain of an entity mentioned in an item of the table from a * CGT event happening in relation to the CGT asset after 11.45 am (by legal time in the Australian Capital Territory) on 21 September 1999; unless the relevant entity mentioned in that item chooses that the cost base includes indexation. Entities for which indexation is not relevant unless chosen Item Indexation is not relevant to the capital gain of this entity: Unless this entity has chosen that the cost base include indexation: 1 An individual The individual 2 A * complying superannuation entity The trustee of the complying superannuation entity 3 A trust The trustee of the trust 4 A listed investment company The company (3) Indexation is not relevant for the purposes of working out under subsection 110 ‑ 36(1): (a) the * cost base of a * CGT asset; and (b) the * capital gain of a * life insurance company from a * CGT event happening after 30 June 2000 in respect of a CGT asset that is a * complying superannuation asset; unless the company chooses that the cost base includes indexation. Note: Section 114 ‑ 5 of the Income Tax (Transitional Provisions) Act 1997 provides that indexation is not relevant to the capital gain of a life insurance company or registered organisation from a CGT event after 11.45 am on 21 September 1999 and before 1 July 2000 unless the company or organisation chooses it.

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 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | 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 169 of 2001, effective s 4, Sch 4, Sch 5 (items 1–9) and Sch 6 (items 1–4, 4A–4C, 5, 5A, 6–16, 16L–16N, 17, 19): 1 Oct 2001 (s 2(1), (4), (4B), (4C), (5)) | Amended by No 32 of 2006, effective 6 Apr 2006 | Amended by No 45 of 2008, effective 26 June 2008 | Amended by No 70 of 2015, effective Sch 1 (items 65–108, 188–192, 195–205): 1 July 2015 (s 2(1) items 3, 4, 6) Sch 2 (items 17, 24–29, 34–39), Sch 6 (items 13–30, 32–38) and Sch 7 (items 1, 5–11): 25 June 2015 (s 2(1) items 7, 11, 13, 20) Sch 4 (items 1, 2) and Sch 5 (item 1): 26 June 2015 (s 2(1) items 7A, 8) Sch 4 (items 3, 4): 1 July 2025 (s 2(1) item 7B) Sch 6 (item 31): 29 June 2013 (s 2(1) item 12) The commencement date for amendments made by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 Sch 4 (items 1, 2) was retrospectively changed from 25 June 2015 to 26 June 2015 | 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 114-10 — Requirement for 12 months ownership

(1) You only index expenditure in the * cost base of a * CGT asset because of subsection 110 ‑ 36(1A) or (1) for a * CGT event happening in relation to the asset if you, or the entity whose cost base is being worked out, had * acquired the asset at least 12 months before the time of the CGT event. Note: Generally, expenditure is indexed from when it is incurred: see subsection 960 ‑ 275(1B) or (2). The exception is when there is an acquisition that did not result from a CGT event. The first element in this case is indexed from when the expenditure was paid: see subsection 960 ‑ 275(1C) or (3). (2) There are 6 exceptions: • one for * CGT event E8: see subsection (3); and • one for roll ‑ overs: see subsections (4) and (5); and • one for deceased estates: see subsection (6); and • one for a surviving joint tenant: see subsection (7); and • one for * CGT event J1: see subsection (8); and • one for a sale and reacquisition taken to have happened under subsection 112 ‑ 155(2), 112 ‑ 165(2) or 112 ‑ 175(2): see subsection (9). CGT event E8 (3) For * CGT event E8, the beneficiary indexes the * cost bases of the * CGT assets of the trust only if the beneficiary * acquired the * CGT asset that is the interest in the trust capital at least 12 months before * disposing of it. It does not matter (for indexation from the beneficiary’s point of view) how long the trustee owned any of the assets of the trust. Same asset roll ‑ overs (4) The 12 month rule is satisfied for both the entity that owned a * CGT asset before a * same ‑ asset roll ‑ over and the entity that owned it after the roll ‑ over if the sum of their periods of ownership of the asset (and the sum of the periods of ownership of the asset of other entities involved in an unbroken series of roll ‑ overs) is at least 12 months. Replacement asset roll ‑ overs (5) The 12 month rule is satisfied for an entity obtaining a * replacement ‑ asset roll ‑ over for a * CGT event happening in relation to a * CGT asset if the period of the entity’s ownership of the original asset (and of other assets for an unbroken series of replacement ‑ asset roll ‑ overs) and of the replacement asset are together at least 12 months. Example: Company A transfers a CGT asset to Company B (which is a member of the same wholly ‑ owned group and a foreign resident) 5 months after acquiring it. There is a roll ‑ over for the transfer under Subdivision 126 ‑ B. Company B sells the asset 8 months after the transfer. Company A indexes expenditure in its cost base up to the transfer. That cost base becomes the first element of Company B’s cost base. Company B indexes its cost base from the transfer to the sale. Deceased estates (6) If a * CGT asset you owned just before dying devolves to your * legal personal representative or * passes to a beneficiary in your estate, the 12 month rule applies to the legal personal representative or the beneficiary as if that entity had * acquired the asset when you acquired it. Surviving joint tenant (7) If individuals own a * CGT asset as joint tenants and one of them dies, the 12 month rule applies to the surviving joint tenant as if the surviving joint tenant had * acquired the deceased’s interest in the asset when the deceased acquired it. Note: The surviving joint tenant is taken to have acquired the deceased’s interest in the asset: see section 128 ‑ 50. CGT event J1 (8) If * CGT event J1 happens, the company that owns the roll ‑ over asset ignores (for indexation purposes) the acquisition rule in subsection 104 ‑ 175(8). Sales and reacquisitions taken to have happened in relation to adjustments to the 50% capital gains discount (9) Disregard subsections 112 ‑ 155(2), 112 ‑ 165(2) and 112 ‑ 175(2) for the purposes of applying the 12 month rule.

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 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | 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 114-15 — Cost base modifications

(1) There are a number of modifications to the * cost base of * CGT assets (see sections 112 ‑ 20 and 112 ‑ 35 and Subdivisions 112 ‑ B, 112 ‑ C and 112 ‑ D). These affect the way indexation because of subsection 110 ‑ 36(1A) or (1) works. (2) If a cost base modification replaces an element of the * cost base of a * CGT asset with an amount, or includes an amount in such an element, you index the element or the amount as if expenditure equal to the amount had been incurred in the * quarter in which the modification occurred. Example: A trust is declared over a CGT asset (an example of CGT event E1). The first element of the cost base in the hands of the trustee is its market value. The trustee indexes that market value from the quarter in which the trust was declared. (3) A different rule applies if a cost base modification reduces the total * cost base of a * CGT asset. Method statement Step 1. Work out the * cost base (all elements) of the asset as at the * quarter in which the modification occurred. Step 2. Subtract the amount of the reduction. Step 3. The Step 2 amount forms a new first element of your * cost base, and is later indexed as if you had incurred expenditure equal to that amount in the * quarter in which the modification occurred. Example: Margaret receives a capital payment of $1,000 for shares (an example of CGT event G1). The first element of her cost base is $10,250 (indexed to the quarter in which the payment was made) and the second element (similarly indexed) is $210. Add those amounts ($10,460) and subtract the $1,000. Her new first element of the cost base is $9,460. There are no other elements at that time. (4) Despite subsection (2), there are different rules for the exercise of an option or the conversion of a * convertible interest. Exercise of options (5) The amount you paid for the option, and the amount you paid to exercise it, are indexed from the * quarter in which the liabilities to pay the amounts were incurred. Example: On 1 April 1997, Robyn grants Andrew an option to buy land she owns. The option fee is $10,000, and the option is to buy the land on 30 June 1998 for $100,000. Andrew exercises the option and acquires the land on 30 June 1998. To work out whether there is a capital gain when Andrew disposes of the land, indexation is available if the land is disposed of 12 months or more after its acquisition. The $10,000 option fee can be indexed from 1 April 1997 (when the liability to pay it was incurred). The $100,000 exercise price can be indexed from 30 June 1998 (when the liability to pay the price was incurred). Convertible interests (6) If you * acquire * shares in a company or units in a unit trust by converting a * convertible interest, the amount paid for the convertible interest, and the amount paid to convert it, are indexed from the * quarter in which the liabilities to pay the amounts were incurred. Note: If shares or units are acquired as a result of the exercise of the option or the conversion of the convertible interest, and an amount is paid to the company or trust on the shares or units after the day of acquisition, that amount is indexed from the time it is paid: see subsection 960 ‑ 275(1C) or (3).

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 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 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 114-20 — When expenditure is incurred for roll ‑ overs

If there is a roll ‑ over for a * CGT event happening in relation to a * CGT asset and the first element of the * cost base of the asset is the whole of the cost base of: (a) for a * replacement ‑ asset roll ‑ over, the original asset; or (b) for a * same ‑ asset roll ‑ over, the CGT asset; when indexing that element because of subsection 110 ‑ 36(1A) or (1), you index that element as if expenditure equal to the amount in that element had been incurred in the * quarter in which the CGT event happened.

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 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 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 114-25 — Residency requirements for individuals for indexation to be included in a cost base under subsection 110 ‑ 36(1A)

(1) This section sets out requirements for indexation to be included under subsection 110 ‑ 36(1A) in the * cost base of a * CGT asset for the purposes of working out your * capital gain from a * CGT event happening in relation to the * CGT asset if: (a) you are an individual; and (b) the CGT event happened while you were holding the CGT asset (as a result of earlier * acquiring it). Note: This section applies for working out a capital gain you make from directly holding the asset. A similar result arises for any capital gain you make indirectly as a beneficiary of a trust (see Subdivision 115 ‑ C, in particular subsections 115 ‑ 225(4) and (5)). (2) You must be neither a foreign resident nor a * temporary resident at any time during the period (the testing period ): (a) starting on the later of 1 July 2027 and the day of * acquiring the * CGT asset; and (b) ending on the day the * CGT event happens. (3) For the purposes of subsection (2), if: (a) another individual owned the * CGT asset on a particular day before the testing period ends; and (b) on that day, that individual was one of the following (that individual’s residency status ): (i) an Australian resident (but not a * temporary resident); (ii) a temporary resident; (iii) a foreign resident; and (c) section 115 ‑ 30 treats you as having * acquired the CGT asset when that individual, or an earlier owner of the CGT asset, acquired it; you are treated as having the same residency status on that day as that individual had on that day. (4) Section 115 ‑ 30 applies to subsections (2) and (3) of this section in a corresponding way to the way that section applies in relation to section 115 ‑ 105. Note: Section 115 ‑ 30 has special rules about when assets are acquired.

Amendment history: Inserted 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 115-1 — What this Division is about

A discount capital gain remaining after the application of any capital losses and net capital losses from previous income years is reduced by the discount percentage when working out your net capital gain. A capital gain from a CGT asset is a discount capital gain only if the entity making the gain acquired the asset at least a year before the CGT event causing the gain and no choice has been made to include indexation in the cost base of the asset. Special rules apply to the net income of trusts with net capital gains (and in certain other circumstances), to ensure that the appropriate discount percentage is applied and to let beneficiaries apply their capital losses against their share of the trust’s capital gains. Special rules apply to certain capital gains made by listed investment companies to enable shareholders receiving dividends that include these gains to obtain benefits similar to those conferred by the CGT discount. For a discount capital gain from a CGT event happening on or after 1 July 2027, a discount of at least 50% continues to be available if the CGT event relates to a new residential dwelling or to the provision of affordable housing.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 169 of 2001, effective s 4, Sch 4, Sch 5 (items 1–9) and Sch 6 (items 1–4, 4A–4C, 5, 5A, 6–16, 16L–16N, 17, 19): 1 Oct 2001 (s 2(1), (4), (4B), (4C), (5)) | 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 115-5 — What is a discount capital gain ?

A discount capital gain is a * capital gain that meets the requirements of sections 115 ‑ 10, 115 ‑ 15, 115 ‑ 20 and 115 ‑ 25. Note: Sections 115 ‑ 40, 115 ‑ 45 and 775 ‑ 70 identify capital gains that are not discount capital gains, despite this section.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 133 of 2003, effective 17 Dec 2003

s 115-10 — Who can make a discount capital gain?

To be a * discount capital gain, the * capital gain must be made by: (a) an individual; or (b) a * complying superannuation entity; or (c) a trust; or (d) a * life insurance company in relation to a * discount capital gain from a * CGT event in respect of a * CGT asset that is a * complying superannuation asset.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | 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 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 45 of 2008, effective 26 June 2008 | Amended by No 70 of 2015, effective Sch 1 (items 65–108, 188–192, 195–205): 1 July 2015 (s 2(1) items 3, 4, 6) Sch 2 (items 17, 24–29, 34–39), Sch 6 (items 13–30, 32–38) and Sch 7 (items 1, 5–11): 25 June 2015 (s 2(1) items 7, 11, 13, 20) Sch 4 (items 1, 2) and Sch 5 (item 1): 26 June 2015 (s 2(1) items 7A, 8) Sch 4 (items 3, 4): 1 July 2025 (s 2(1) item 7B) Sch 6 (item 31): 29 June 2013 (s 2(1) item 12) The commencement date for amendments made by the Tax and Superannuation Laws Amendment (2015 Measures No. 1) Act 2015 Sch 4 (items 1, 2) was retrospectively changed from 25 June 2015 to 26 June 2015

s 115-15 — Discount capital gain must be made after 21 September 1999

To be a * discount capital gain, the * capital gain must result from a * CGT event happening after 11.45 am (by legal time in the Australian Capital Territory) on 21 September 1999.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 115-20 — Discount capital gain must not have indexed cost base

(1) To be a * discount capital gain, the * capital gain must have been worked out: (a) using a * cost base that has been calculated without reference to indexation at any time; or (b) for a capital gain that arose under * CGT event K7—using the * cost of the * depreciating asset concerned. Note: A listed investment company must also calculate capital gains without reference to indexation in order to allow its shareholders to access the concessions in Subdivision 115 ‑ D. (2) For the purposes of working out whether the * capital gain is a * discount capital gain and the amount of that gain, the * cost base taken into account in working out the capital gain may be recalculated without reference to indexation if the cost base had an element including indexation because of another provision of this Act. This subsection has effect despite that other provision. Note: This lets a capital gain of an entity (the gain entity ) on a CGT asset be a discount capital gain even if: (a) another provision of this Act (such as a provision for a same ‑ asset roll ‑ over or Division 128) set the gain entity’s cost base for the asset by reference to the cost base for the asset when it was owned by another entity (the earlier owner ), and the earlier owner’s cost base for the asset included indexation; or (b) another provision of this Act (such as a provision for a replacement ‑ asset roll ‑ over) set the cost base of the asset by reference to the cost base of the original asset involved in the roll ‑ over, and the original asset’s cost base included indexation. Example: In 1995 Elizabeth acquired land from her ex ‑ husband under an order made by a court under the Family Law Act 1975 . Former section 160ZZM of the Income Tax Assessment Act 1936 treated her as having paid $56,000 for the land, equal to her ex ‑ husband’s indexed cost base for it. His cost base for the land then was $40,000. In 2000, she sold the land for capital proceeds of $150,000. Her discount capital gain on the land is $110,000 (equal to the capital proceeds less the cost base for the land without indexation). (3) This section does not apply to a * capital gain worked out under subsection 104 ‑ 255(3) (about carried interests).

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Repealed and substituted 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 169 of 2001, effective s 4, Sch 4, Sch 5 (items 1–9) and Sch 6 (items 1–4, 4A–4C, 5, 5A, 6–16, 16L–16N, 17, 19): 1 Oct 2001 (s 2(1), (4), (4B), (4C), (5)) | 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 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent

s 115-25 — Discount capital gain must be on asset acquired at least 12 months before

(1) To be a * discount capital gain, the * capital gain must result from a * CGT event happening to a * CGT asset that was * acquired by the entity making the capital gain at least 12 months before the CGT event. Note 1: Even if the capital gain results from a CGT event happening at least a year after the CGT asset was acquired, the gain may not be a discount capital gain, depending on the cause of the CGT event (see section 115 ‑ 40) and the nature of the asset (see sections 115 ‑ 45 and 115 ‑ 50). Note 2: Section 115 ‑ 30 or 115 ‑ 34 may affect the time when the entity is treated as having acquired the CGT asset. (2) To avoid doubt, subsection (1) applies to the * CGT asset shown in the table for a * CGT event listed in the table. CGT assets to which subsection (1) applies Item CGT event CGT asset to which subsection (1) applies 1A D4 the land over which the * conservation covenant is entered into 1 E8 the interest or part interest in the trust capital 2 K6 the * share or interest * acquired before 20 September 1985 (2A) If the * capital gain results from a * CGT event K9 happening: (a) subsection (1) does not apply; and (b) to be a * discount capital gain, the * carried interest to which the CGT event relates must arise under a partnership agreement entered into at least 12 months before the CGT event. (3) A * capital gain from one of these * CGT events is not a discount capital gain (despite section 115 ‑ 5): (a) * CGT event D1; (b) * CGT event D2; (c) * CGT event D3; (d) * CGT event E9; (e) * CGT event F1; (f) * CGT event F2; (g) * CGT event F5; (h) * CGT event H2; (ha) * CGT event J2; (hb) * CGT event J5; (hc) * CGT event J6; (i) * CGT event K10. Note: Capital gains from the CGT events mentioned in paragraphs (3)(a) to (f) are not discount capital gains because the CGT asset involved in the CGT event comes into existence at the time of the event, so it is impossible to meet the requirement in this section that the asset have been acquired at least 12 months before the event.

Amendment history: Amended 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)) | Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 167 of 2001, effective Sch 4 (items 8–10) and Sch 7 and 8: 1 Oct 2001 (s 2(1)) | Amended by No 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 133 of 2003, effective 17 Dec 2003 | 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)