Income Tax Assessment Act 1997

s 115-30 — Special rules about time of acquisition

Entity is treated as acquiring some CGT assets early (1) Sections 115 ‑ 25, 115 ‑ 40, 115 ‑ 45, 115 ‑ 105, 115 ‑ 110 and 115 ‑ 115 (the affected sections ) apply as if an entity (the acquirer ) had acquired a * CGT asset described in an item of the table at the time mentioned in the item: When the acquirer is treated as having acquired a CGT asset Item The affected sections apply as if the acquirer had acquired this CGT asset: At this time: 1 A * CGT asset the acquirer * acquired in circumstances giving rise to a * same ‑ asset roll ‑ over (a) when the entity that owned the CGT asset before the roll ‑ over * acquired it; or (b) if the asset has been involved in an unbroken series of roll ‑ overs—when the entity that owned it before the first roll ‑ over in the series * acquired it 2 A * CGT asset that the acquirer * acquired as a replacement asset for a * replacement ‑ asset roll ‑ over (other than a roll ‑ over covered by paragraph 115 ‑ 34(1)(c)) (a) when the acquirer acquired the original asset involved in the roll ‑ over; or (b) if the acquirer acquired the replacement asset for a roll ‑ over that was the last in an unbroken series of replacement ‑ asset roll ‑ overs (other than roll ‑ overs covered by paragraph 115 ‑ 34(1)(c))—when the acquirer acquired the original asset involved in the first roll ‑ over in the series 3 A * CGT asset the acquirer * acquired as the * legal personal representative of a deceased individual, except one that was a * pre ‑ CGT asset of the deceased immediately before his or her death When the deceased * acquired the asset 4 A * CGT asset that * passed to the acquirer as the beneficiary of a deceased individual’s estate, except one that was a * pre ‑ CGT asset of the deceased immediately before his or her death When the deceased * acquired the asset 5 A * CGT asset that: (a) the acquirer * acquired as the * legal personal representative of a deceased individual; and (b) was a * pre ‑ CGT asset of the deceased immediately before his or her death When the deceased died 6 A * CGT asset that: (a) * passed to the acquirer as the beneficiary of a deceased individual’s estate; and (b) was a * pre ‑ CGT asset of the deceased immediately before his or her death When the deceased died 7 The interest (or share of an interest) the acquirer is taken under section 128 ‑ 50 to have * acquired in another * CGT asset that the acquirer and another individual held as joint tenants immediately before he or she died When the deceased * acquired his or her interest in the other CGT asset 9 A * CGT asset that: (a) is a * membership interest in the receiving trust involved in a roll ‑ over under Subdivision 126 ‑ G; and (b) is held by the acquirer just after the transfer time for the roll ‑ over (a) when the acquirer * acquired the corresponding membership interest (or membership interests) in the transferring trust involved in the roll ‑ over; or (b) if the roll ‑ over asset for the roll ‑ over has been involved in an unbroken series of roll ‑ overs under Subdivision 126 ‑ G—when the acquirer acquired the corresponding membership interest (or membership interests) in the transferring trust involved in the first roll ‑ over in the series 9A A * share the acquirer * acquires by exercising an * ESS interest if: (a) section 83A ‑ 33 (about start ups) reduces the amount to be included in the acquirer’s assessable income in relation to the ESS interest; and (b) exercising the ESS interest causes Subdivision 130 ‑ B or Division 134 to apply When the acquirer * acquired the * ESS interest 10 A * CGT asset that the acquirer * acquired as a received asset for a roll ‑ over under Subdivision 310 ‑ D (a) when the transferring entity for the roll ‑ over acquired the corresponding original asset for the roll ‑ over; or (b) if that original asset (or any asset corresponding to it) has been involved in an unbroken series of roll ‑ overs—when the entity that owned the applicable asset before the first roll ‑ over in the series acquired it Note: Under section 128 ‑ 50, the acquirer is taken to acquire the interest of a deceased individual in a CGT asset the acquirer and the deceased held as joint tenants immediately before the deceased’s death (or an equal share of that interest if there are other surviving joint tenants). (1A) For the purposes of sections 115 ‑ 105, 115 ‑ 110 and 115 ‑ 115, item 2 of the table in subsection (1) applies in relation to all * replacement ‑ asset roll ‑ overs, including those covered by paragraph 115 ‑ 34(1)(c). CGT event E8 (2) For the purposes of applying sections 115 ‑ 25 and 115 ‑ 40 in relation to * CGT event E8 and the * CGT asset consisting of a beneficiary’s interest in trust capital, it does not matter how long the trustee owned any of the assets of the trust. Note: Section 115 ‑ 45 limits the effect of this subsection in some cases. Relationship with Subdivision 109 ‑ A and Division 128 (3) This section has effect despite Subdivision 109 ‑ A and Division 128 (which contain rules about the time when you * acquire a * CGT 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 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 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 56 of 2007, effective 12 Apr 2007 | 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 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 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22) | Amended by No 105 of 2015, effective Sch 1 (items 2–41, 44–51): 1 July 2015 (s 2)

s 115-32 — Special rule about time of acquisition for certain replacement ‑ asset roll ‑ overs

(1) This section applies if: (a) a * CGT event happens to: (i) your * share in a company; or (ii) your * trust voting interest, unit or other fixed interest in a trust; and (b) you * acquired the share or interest as a replacement asset for a * replacement ‑ asset roll ‑ over (other than a roll ‑ over covered by paragraph 115 ‑ 34(1)(c)); and (c) at the time of the CGT event, the company or trust: (i) owns a * membership interest in an entity (the original entity ); and (ii) has owned that membership interest for less than 12 months; and (d) that membership interest is the original asset for the roll ‑ over. Note: This section does not affect the time when you are treated as having acquired the replacement asset. That time is worked out under item 2 of the table in subsection 115 ‑ 30(1). Application of tests about the assets of the company or trust (2) Subsection 115 ‑ 45(4) applies as if the company or trust had * acquired the original asset at least 12 months before the * CGT event, if the condition in that subsection would not be met were it to be applied to the original entity and the CGT event. (3) Subsection 115 ‑ 45(6) applies as if the company or trust had * acquired the original asset at least 12 months before the * CGT event, if the condition in subsection 115 ‑ 45(5) would not be met were it to be applied to the original entity and the CGT event.

Amendment history: Inserted 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 115-34 — Further special rule about time of acquisition for certain replacement ‑ asset roll ‑ overs

(1) This section applies if: (a) a * CGT event happens to your * share in a company; and (b) at the time of the CGT event, you had owned the share for less than 12 months; and (c) you * acquired the share as a replacement asset for: (i) a * replacement ‑ asset roll ‑ over under Subdivision 122 ‑ A (disposal of assets by individuals or trustees to a wholly ‑ owned company) for which you * disposed of a * CGT asset, or all the assets of a * business, to the company; or (ii) a replacement ‑ asset roll ‑ over under Subdivision 122 ‑ B (disposal of assets by partners to a wholly ‑ owned company) for which you disposed of your interests in a CGT asset, or your interests in all the assets of a business, to the company; or (iii) a replacement ‑ asset roll ‑ over under Subdivision 124 ‑ N (disposal of assets by trusts to a company) for which a trust of which you were a beneficiary disposed of all of its CGT assets to the company. Application of tests about when you acquired the share (2) Sections 115 ‑ 25 and 115 ‑ 40 apply as if you had * acquired the * share at least 12 months before the * CGT event. Application of tests about the company’s assets (3) For each asset mentioned in subparagraph (1)(c)(i), subsections 115 ‑ 45(4) and (6) apply as if the company had * acquired that asset when you acquired it. (4) For each asset mentioned in subparagraph (1)(c)(ii), subsections 115 ‑ 45(4) and (6) apply as if the company had * acquired that asset when you acquired your interests in it. (5) For each asset mentioned in subparagraph (1)(c)(iii), subsections 115 ‑ 45(4) and (6) apply as if the company had * acquired that asset when the trust acquired it. Relationship with Subdivision 109 ‑ A (6) This section has effect despite Subdivision 109 ‑ A (which contains rules about the time of acquisition of CGT assets).

Amendment history: Inserted 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 115-40 — Capital gain resulting from agreement made within a year of acquisition

Your * capital gain on a * CGT asset from a * CGT event is not a discount capital gain (despite section 115 ‑ 5) if the CGT event occurred under an agreement you made within 12 months of * acquiring the CGT asset. Note: Section 115 ‑ 30 or 115 ‑ 34 may affect the time when you are treated as having acquired the CGT 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 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 115-45 — Capital gain from equity in an entity with newly acquired assets

Purpose of this section (1) The purpose of this section is to deny you a * discount capital gain on your * share in a company or interest in a trust if you would not have had * discount capital gains on the majority of * CGT assets (by cost and by value) underlying the share or interest if: (a) you had owned them for the time the company or trust did; and (b) * CGT events had happened to them when the CGT event happened to your share or interest. When a capital gain is not a discount capital gain (2) Your * capital gain from a * CGT event happening to: (a) your * share in a company; or (b) your * trust voting interest, unit or other fixed interest in a trust; is not a discount capital gain if the 3 conditions in subsections (3), (4) and (5) are met. This section has effect despite section 115 ‑ 5 and subsection 115 ‑ 30(2). Note: This section does not prevent a capital gain from being a discount capital gain if there are at least 300 members or beneficiaries of the company or trust and control of the company or trust is not and cannot be concentrated (see section 115 ‑ 50). You had at least 10% of the equity in the entity before the event (3) The first condition is that, just before the * CGT event, you and your * associates beneficially owned: (a) at least 10% by value of the * shares in the company (except shares that carried a right only to participate in a distribution of profits or capital to a limited extent); or (b) at least 10% of the * trust voting interests, issued units or other fixed interests (as appropriate) in the trust. Cost bases of new assets are more than 50% of all cost bases of entity’s assets (4) The second condition is that the total of the * cost bases of * CGT assets that the company or trust owned at the time of the * CGT event and had * acquired less than 12 months before then is more than half of the total of the * cost bases of the * CGT assets the company or trust owned at the time of the event. Note: Sections 115 ‑ 30 and 115 ‑ 32, or section 115 ‑ 34, may affect the time when the company or trust is treated as having acquired a CGT asset. Net capital gain on entity’s new assets would be more than 50% of net capital gain on all the entity’s assets (5) The third condition is that the amount worked out under subsection (6) is more than half of the amount worked out under subsection (7). (6) Work out the amount that would be the * net capital gain of the company or trust for the income year if: (a) just before the * CGT event, the company or trust had * disposed of all of the * CGT assets that it owned then and had * acquired less than 12 months before the * CGT event; and (b) it had received the * market value of those assets for the disposal; and (c) the company or trust did not have any * capital gains or * capital losses from * CGT events other than the disposal; and (d) the company or trust did not have a * net capital loss for an earlier income year. Note: Sections 115 ‑ 30 and 115 ‑ 32, or section 115 ‑ 34, may affect the time when the company or trust is treated as having acquired a CGT asset. (7) Work out the amount that would be the * net capital gain of the company or trust for the income year if: (a) just before the * CGT event, the company or trust had * disposed of all of the * CGT assets that it owned then; and (b) it had received the * market value of those assets for the disposal; and (c) all of the * capital gains and * capital losses from those assets were taken into account in working out the net capital gain, despite any rules providing that one or more of those capital gains or losses are not to be taken into account in working out the net capital gain; and (d) the company or trust did not have any * capital gains or * capital losses from * CGT events other than the disposal; and (e) the company or trust did not have a * net capital loss for an earlier income year.

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 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)

s 115-50 — Discount capital gain from equity in certain entities

Capital gain from share in company with 300 members (1) Section 115 ‑ 45 does not prevent a * capital gain from a * CGT event happening to a * share in a company with at least 300 * members from being a * discount capital gain, unless subsection (3) or (6) applies in relation to the company. Capital gain from interest in fixed trust with 300 beneficiaries (2) Section 115 ‑ 45 does not prevent a * capital gain from a * CGT event happening to an interest in a trust from being a * discount capital gain if: (a) entities have * fixed entitlements to all of the income and capital of the trust; and (b) the trust has at least 300 beneficiaries; and (c) neither subsection (4) nor subsection (6) applies in relation to the trust. No discount capital gain if ownership is concentrated (3) Section 115 ‑ 45 may prevent a * capital gain from a * share in a company from being a * discount capital gain if an individual owns, or up to 20 individuals own between them, directly or indirectly (through one or more interposed entities) and for their own benefit, * shares in the company: (a) carrying * fixed entitlements to: (i) at least 75% of the company’s income; or (ii) at least 75% of the company’s capital; or (b) carrying at least 75% of the voting rights in the company. (4) Section 115 ‑ 45 may prevent a * capital gain from an interest in a trust from being a * discount capital gain if an individual owns, or up to 20 individuals own between them, directly or indirectly (through one or more interposed entities) and for their own benefit, interests in the trust: (a) carrying * fixed entitlements to: (i) at least 75% of the trust’s income; or (ii) at least 75% of the trust’s capital; or (b) if beneficiaries of the trust have a right to vote in respect of activities of the trust—carrying at least 75% of those voting rights. (5) Subsections (3) and (4) operate as if all of these were a single individual: (a) an individual, whether or not the individual holds * shares in the company or interests in the trust (as appropriate); (b) the individual’s * associates; (c) for any * shares or interests in respect of which other individuals are nominees of the individual or of the individual’s associates—those other individuals. No discount capital gain if rights can be varied to concentrate ownership (6) Section 115 ‑ 45 may prevent a * capital gain from a * share in a company, or from an interest in a trust, from being a * discount capital gain if, because of anything listed in subsection (7), it is reasonable to conclude that the rights attaching to any of the * shares in the company or interests in the trust (as appropriate) can be varied or abrogated in such a way that subsection (3) or (4) would be satisfied. (7) These are the things: (a) any provision in the constituent document of the company or trust, or in any contract, agreement or instrument: (i) authorising the variation or abrogation of rights attaching to any of the * shares in the company or interests in the trust (as appropriate); or (ii) relating to the conversion, cancellation, extinguishment or redemption of any of those shares or interests; (b) any contract, * arrangement, option or instrument under which a person has power to acquire any of those shares or interests; (c) any power, authority or discretion in a person in relation to the rights attaching to any of those shares or interests. (8) It does not matter for the purposes of subsection (6) whether or not the rights attaching to any of the * shares or interests are varied or abrogated in the way described in that subsection.

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 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 115-55 — Capital gains involving money received from demutualisation of friendly society health or life insurer

Your * capital gain from a * CGT event is not a discount capital gain if it is affected by section 316 ‑ 60 or 316 ‑ 165. Note: Those sections affect capital gains involving the receipt of money as a result of the demutualisation of a friendly society health or life insurer.

Amendment history: Inserted by No 88 of 2009, effective s. 4, Schedule 3 (items 1, 5–23), Schedule 4 (items 2–5) and Schedule 5 (items 113–204, 237, 238, 258, 282, 319–341, 344): 18 Sept 2009 Schedule 2 (items 4–15, 25–27, 30, 31): 1 Oct 2009 Schedule 2 (item 23): 1 Jan 2010

s 115-102 — New residential dwellings

(1) This section applies to a * discount capital gain if: (a) you are an individual; and (b) neither section 115 ‑ 105 nor 115 ‑ 110 (about foreign or temporary residents) applies to the discount capital gain; and (c) either: (i) you make the discount capital gain from a * CGT event happening on or after 1 July 2027 in relation to a * CGT asset covered by subsection (2); or (ii) because of section 115 ‑ 215, Division 102 applies to you as if you had made the discount capital gain for a * capital gain of a trust covered by subsection (4); and (d) where subparagraph (c)(ii) applies—the trust’s capital gain was made directly, or indirectly through one or more entities that are all covered by subsection (4), from a CGT event happening on or after 1 July 2027 in relation to a CGT asset covered by subsection (2). Note: The discount percentage for the discount capital gain is 50% (see paragraph 115 ‑ 100(a)). CGT assets to which this section relates (2) This subsection covers a * new residential dwelling. Relevant trusts and interposed entities (4) This subsection covers the following: (a) a trust, other than a * superannuation fund or a public unit trust (within the meaning of section 102P of the Income Tax Assessment Act 1936 ); (b) a partnership. Note: For paragraph (a), a trust includes a managed investment trust. Indexation may be able to be chosen as an alternative (5) Despite subsection (1), the following person may choose for this section not to apply to the * discount capital gain: (a) if you make the discount capital gain in the way described in subparagraph (1)(c)(i)—you; (b) if you make the discount capital gain in the way described in subparagraph (1)(c)(ii)—the trustee of the trust. Such a choice by the trustee applies to you in a similar way to a choice made by you for a gain covered by paragraph (a). Note: Instead, the cost base of the CGT asset may be able to be indexed (see subsection 110 ‑ 36(1A)).

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 115-100 — What is the discount percentage for a discount capital gain

The discount percentage for an amount of a * discount capital gain is: (a) 50% if section 115 ‑ 102 (about new residential dwellings) applies to the gain; or (aa) 50% if: (i) the gain is made by an individual from a * CGT event happening before 1 July 2027; and (ii) neither section 115 ‑ 105 nor 115 ‑ 110 (about foreign or temporary residents) applies to the gain; or (ab) 50% if: (i) the gain is made by a trust (other than a trust that is a * complying superannuation entity) from a * CGT event happening before 1 July 2027; and (ii) section 115 ‑ 120 (about foreign or temporary residents) does not apply to the gain; or (b) 33 1 / 3 % if the gain is made: (i) by a complying superannuation entity; or (ii) by a * life insurance company from a * CGT asset that is a * complying superannuation asset; or (c) the percentage resulting from section 115 ‑ 115 if section 115 ‑ 105 or 115 ‑ 110 applies to the gain; or (d) the percentage resulting from section 115 ‑ 120 if that section applies to the gain; or (e) the percentage resulting from section 115 ‑ 125 if that section applies to the gain; or (f) 0% if none of the above paragraphs applies to the gain.

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 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 45 of 2008, effective 26 June 2008 | Amended by No 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22) | 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 129 of 2019, effective Sch 1 (items 1–31, 33–36) and Sch 2: 1 Jan 2020 (s 2(1) item 2) | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 115-105 — Foreign or temporary residents—individuals with direct gains

Object (1) The object of this section (with section 115 ‑ 115) is to adjust the discount percentage so as to deny you a discount to the extent that you accrued a * capital gain while a foreign resident or * temporary resident. When this section applies (2) This section applies to a * discount capital gain if: (a) you are an individual; and (b) you * acquire a * CGT asset; and (c) you make the discount capital gain from a * CGT event happening in relation to the CGT asset; and (d) the period (the discount testing period ): (i) starting on the day you acquired the CGT asset; and (ii) ending on the day the CGT event happens; ends after 8 May 2012; and (e) you were a foreign resident or * temporary resident during some or all of so much of that period as is after 8 May 2012. Note: Section 115 ‑ 30 has special rules about when assets are acquired. Changed residency status (3) For the purposes of this section and section 115 ‑ 115, if: (a) another individual owned the * CGT asset on a particular day before the discount 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.

Amendment history: Inserted by No 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22)

s 115-110 — Foreign or temporary residents—individuals with trust gains

Object (1) The object of this section (with section 115 ‑ 115) is to adjust the discount percentage so as to deny you a discount for a * capital gain you make because of section 115 ‑ 215 to the extent that the gain was accrued while you were a foreign resident or * temporary resident. When this section applies (2) This section applies to a * discount capital gain if: (a) you are an individual and a beneficiary of a trust ( your trust ); and (b) because of section 115 ‑ 215, Division 102 applies to you as if you had made the discount capital gain on a particular day ( your gain day ) for a * capital gain (the relevant trust gain ) of the trust estate; and (c) the period (the discount testing period ) worked out from the following table ends after 8 May 2012; and (d) you were a foreign resident or * temporary resident during some or all of so much of that period as is after 8 May 2012. Working out the discount testing period Item Column 1 If this is the case: Column 2 the discount testing period is: 1 your trust is a * fixed trust the period: (a) starting on the most recent day (before your gain day) that you became a beneficiary of your trust; and (b) ending on your gain day. 2 your trust is not a * fixed trust and the relevant trust gain: (a) is made because a * CGT event happened in relation to a * CGT asset * acquired by the trustee of your trust; or (b) is referable (either directly or indirectly through one or more interposed trusts that are not fixed trusts) to a * capital gain made by the trustee of another trust that is not a fixed trust because a CGT event happened in relation to a CGT asset acquired by that trustee the period: (a) starting on the day of that acquisition; and (b) ending on your gain day. 3 your trust is not a * fixed trust and the relevant trust gain is referable (either directly or indirectly through one or more interposed trusts that are not fixed trusts) to a * capital gain made by a fixed trust the period: (a) starting on the most recent day (before your gain day) that the trust whose capital gain is directly referable to the capital gain made by the fixed trust became a beneficiary of the fixed trust; and (b) ending on your gain day. Note: Section 115 ‑ 30 has special rules about when assets (including membership interests in trusts) are acquired. Changed residency status (3) For the purposes of this section and section 115 ‑ 115, if: (a) your trust is a * fixed trust and another individual owned your * membership interest in your trust on a particular day before the discount 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 your membership interest in your trust when that individual, or an earlier owner of that membership interest, acquired it; you are treated as having the same residency status on that day as that individual had on that day.

Amendment history: Inserted by No 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22)

s 115-115 — Foreign or temporary residents—percentage for individuals

(1) This section applies if section 115 ‑ 105 or 115 ‑ 110 applies to a * discount capital gain. Periods starting after 8 May 2012 (2) If the discount testing period starts after 8 May 2012, the following (expressed as a percentage) is the percentage resulting from this section: Note 1: The percentage will be 0% if you were a foreign resident or temporary resident during all of the discount testing period. Note 2: Subsection 115 ‑ 105(3) or 115 ‑ 110(3) may change your residency status for this formula. Periods starting earlier—Australian residents (3) If: (a) the discount testing period starts on or before 8 May 2012; and (b) you were an Australian resident (but not a * temporary resident) on 8 May 2012; the following (expressed as a percentage) is the percentage resulting from this section: where: apportionable day means a day, after 8 May 2012, during the discount testing period. Note: Subsection 115 ‑ 105(3) or 115 ‑ 110(3) may change your residency status for this formula. Periods starting earlier—other residents may choose market value (4) The percentage resulting from this section is worked out from the following table if: (a) the discount testing period starts on or before 8 May 2012; and (b) you were a foreign resident or * temporary resident on 8 May 2012; and (c) the most recent * acquisition (before the * CGT event) of the * CGT asset happened on or before 8 May 2012; and (d) the CGT asset’s * market value on 8 May 2012 exceeds the amount that was its * cost base at the end of that day; and (e) you choose for this subsection to apply. Note 1: The CGT event and CGT asset are those expressly or impliedly referred to in section 115 ‑ 105 or 115 ‑ 110. Note 2: Section 115 ‑ 30 has special rules about when assets are acquired. Percentage using market value Item Column 1 If the excess from paragraph (d): Column 2 then, the percentage is: 1 is equal to or greater than the amount of the * discount capital gain 50%. 2 falls short of the amount of the * discount capital gain worked out under subsection (5). (5) For the purposes of table item 2 in subsection (4), the following (expressed as a percentage) is the percentage resulting from this section: where: apportionable day means a day, after 8 May 2012, during the discount testing period. eligible resident means an Australian resident who is not a * temporary resident. excess means the excess from paragraph (4)(d). shortfall means the amount that the excess falls short of the amount of the * discount capital gain. Note: Subsection 115 ‑ 105(3) or 115 ‑ 110(3) may change your residency status for this formula. Periods starting earlier—other residents not choosing market value (6) If: (a) the discount testing period starts on or before 8 May 2012; and (b) you were a foreign resident or * temporary resident on 8 May 2012; and (c) subsection (4) does not apply; the following (expressed as a percentage) is the percentage resulting from this section: where: apportionable day means a day, after 8 May 2012, during the discount testing period. Note 1: The percentage will be 0% if you were a foreign resident or temporary resident on each of the apportionable days. Note 2: Subsection 115 ‑ 105(3) or 115 ‑ 110(3) may change your residency status for this formula.

Amendment history: Inserted by No 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22)

s 115-120 — Foreign or temporary residents—trusts with certain gains

(1) The object of this section is to adjust the discount percentage so as to deny a trustee a discount for a * capital gain for which the trustee is liable: (a) to be assessed; and (b) to pay tax; under section 98 of the Income Tax Assessment Act 1936 in relation to the trust estate in respect of a beneficiary to the extent that the beneficiary was a foreign resident or * temporary resident. (2) This section applies to a * discount capital gain of a trust estate if: (a) you are the trustee of that trust; and (b) section 115 ‑ 220 applies to you in relation to the discount capital gain and a beneficiary of the trust who is an individual. (3) The percentage resulting from this section is the same as the * discount percentage for the corresponding * discount capital gain the beneficiary would have made for the purposes of Division 102 had section 115 ‑ 215 applied to the beneficiary.

Amendment history: Inserted by No 124 of 2013, effective Sch 1 (items 37–45), Sch 5 (items 7, 8(1)), Sch 7, Sch 8, Sch 10 (items 1–11, 13): 29 June 2013 (s 2(1) items 2, 10–12) Sch 2 (items 2–6, 21–42, 48): 11 July 2013 (s 2(1) item 3) Sch 2 (item 66): 11 July 2013 (s 2(1) item 5) Sch 10 (item 14): never commenced (s 2(1) item 13) Sch 11 (items 1–3): 3 Dec 2012 (s 2(1) item 15) Sch 11 (items 5, 6, 9): 28 June 2013 (s 2(1) item 16) Sch 11 (items 28, 32(1), 35–56): 30 June 2013 (s 2(1) items 18, 20, 22)

s 115-125 — Investors disposing of property used for affordable housing

Object (1) The object of this section is to increase the discount percentage to the extent that the * discount capital gain relates to a * dwelling used to * provide affordable housing. When this section applies (2) This section applies to a * discount capital gain if: (a) you are an individual; and (b) either: (i) you make the discount capital gain from a * CGT event happening in relation to a * CGT asset that is your * ownership interest in a * dwelling; or (ii) because of section 115 ‑ 215, Division 102 applies to you as if you had made the discount capital gain for a * capital gain of a trust covered by subsection (3); and (c) where subparagraph (b)(ii) applies—the trust’s capital gain was made directly, or indirectly through one or more entities that are all covered by subsection (3), from a CGT event happening in relation to a CGT asset that is an ownership interest in a dwelling; and (d) the dwelling was used to * provide affordable housing on at least 1095 days: (i) before the CGT event; and (ii) during your, or the relevant trustee’s or partner’s, * ownership period of that dwelling; and (iii) on or after 1 January 2018. The days mentioned in paragraph (d) need not be consecutive. Note 1: 1095 days is the same as 3 years. Note 2: It may be possible to choose indexation as an alternative to a discount under this section (see subsection (6)). (3) This subsection covers the following: (a) a trust, other than a * superannuation fund or a public unit trust (within the meaning of section 102P of the Income Tax Assessment Act 1936 ); (c) a partnership. Note: For paragraph (a), a trust includes a managed investment trust. Discount percentage (4) The percentage resulting from this section is the sum of: (a) either: (i) 50% if neither section 115 ‑ 105 nor 115 ‑ 110 (about foreign or temporary residents) applies to the * discount capital gain; or (ii) the * discount percentage that, apart from this section, would result from section 115 ‑ 115 if section 115 ‑ 105 or 115 ‑ 110 applies to the discount capital gain; and (b) the result (expressed as a percentage) of subsection (5). (5) Work out the following: where: affordable housing days means the number of days during that * ownership period (see paragraph (2)(d)) of the * dwelling, and on or after 1 January 2018, on which: (a) the dwelling was used to * provide affordable housing; and (b) you were neither a foreign resident nor a * temporary resident. total ownership days means the number of days during that * ownership period (see paragraph (2)(d)) of the * dwelling, less the number of days after 8 May 2012 during that ownership period that you were a foreign resident or a * temporary resident. Indexation may be able to be chosen as an alternative (6) If the percentage that would result from this section for you and the * discount capital gain is 60%, then, despite subsection (2), the following person may choose for this section not to apply to the discount capital gain: (a) if you make the discount capital gain in the way described in subparagraph (2)(b)(i)—you; (b) if you make the discount capital gain in the way described in subparagraph (2)(b)(ii)—the trustee of the trust. Such a choice by the trustee applies to you in a similar way to a choice made by you for a gain covered by paragraph (a). Note: Instead, the cost base of the CGT asset may be able to be indexed (see subsection 110 ‑ 36(1A)).

Amendment history: Inserted by No 129 of 2019, effective Sch 1 (items 1–31, 33–36) and Sch 2: 1 Jan 2020 (s 2(1) item 2) | Amended by No 49 of 2026, effective sch 1 (items 1-51, 54-59, 64-79A, 82-84), sch 3, sch 4 (items 1-17): 1 July 2026 (s 2(1) items 2-4, 6) sch 2 (items 1-5): 27 June 2026 (s 2(1) item 5)

s 115-200 — What this Division is about

This Subdivision sets out rules for dealing with the net income of a trust that has a net capital gain. The rules treat parts of the net income attributable to the trust’s net capital gain as capital gains made by the beneficiary entitled to those parts. This lets the beneficiary reduce those parts by any capital losses and unapplied net capital losses it has. If the trust’s capital gain was reduced by either the general 50% discount in step 5 of the method statement in subsection 102 ‑ 5(1) or by the small business 50% reduction in Subdivision 152 ‑ C (but not both), then the gain is doubled. The beneficiary can then apply its capital losses to the gain before applying the appropriate discount percentage (if any) or the small business 50% reduction. If the trust’s capital gain was reduced by both the general 50% discount and the small business 50% reduction, then the gain is multiplied by 4. The beneficiary can then apply its capital losses to the gain before applying the appropriate discount percentage (if any) and the small business 50% reduction. Division 6E of Part III of the Income Tax Assessment Act 1936 will exclude amounts from the beneficiary’s assessable income if necessary to prevent it from being taxed twice on the same parts of the trust’s net income. Table of sections Operative provisions 115 ‑ 210 When this Subdivision applies 115 ‑ 215 Assessing presently entitled beneficiaries 115 ‑ 220 Assessing trustees under section 98 of the Income Tax Assessment Act 1936 115 ‑ 222 Assessing trustees under section 99 or 99A of the Income Tax Assessment Act 1936 115 ‑ 225 Attributable gain 115 ‑ 227 Share of a capital gain 115 ‑ 228 Specifically entitled to an amount of a capital gain 115 ‑ 230 Choice for resident trustee to be specifically entitled to capital gain

Amendment history: Repealed and substituted 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 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 115-235 — Giving information to beneficiaries

(1) If a trust is covered by a determination under subsection (4), the trustee must: (a) prepare a statement for each beneficiary of the trust who, because of subsection 115 ‑ 215(3), makes one or more * capital gains for an income year in relation to capital gains of the trust estate for the income year; and (b) ensure the statement complies with subsection (2); and (c) give the statement to the beneficiary within the period specified in, or worked out under, the determination. Note: Section 286 ‑ 75 in Schedule 1 to the Taxation Administration Act 1953 provides an administrative penalty for breach of this subsection. (2) The statement complies with this subsection if it: (a) is in the * approved form; and (b) states the amount of each of those * capital gains that the beneficiary makes; and (c) sets out which of those capital gains are * non ‑ residential capital gains, * residential capital gains, * deferred non ‑ residential capital gains or * deferred residential capital gains; and (d) sets out the effect of subsections 115 ‑ 215(4), and 115 ‑ 225(5) if applicable, in relation to each of those capital gains. Note: Subsection 115 ‑ 215(4) deals with the status of capital gains as discount capital gains, and the effect of Subdivision 152 ‑ C having been applied to the trust gain. Subsection 115 ‑ 225(5) makes adjustments to remove the effect of indexation on the cost bases of the relevant CGT assets. (3) A trustee of a trust is not required to prepare and give a statement under subsection (1) for an income year if a report is given, or required to be given, under section 393 ‑ 10 in Schedule 1 to the Taxation Administration Act 1953 in respect of the trust estate for the * financial year that corresponds to the income year. (4) The Commissioner may, by legislative instrument, determine that trustees of all or specified kinds of trusts are required: (a) to prepare and give statements under subsection (1) to beneficiaries of the trusts; and (b) to do so before the end of: (i) a specified period; or (ii) a period worked out using a specified method.

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 115-210 — When this Subdivision applies

(1) This Subdivision applies if a trust estate has a * net capital gain for an income year that is taken into account in working out the trust estate’s net income (as defined in section 95 of the Income Tax Assessment Act 1936 ) for the income year. Note: This Subdivision has an extended application under Subdivision 115 ‑ CA (about trusts that would have net capital gains if indexation were disregarded). (2) If the trust estate has a beneficiary that is a * complying superannuation entity that is a trust, this Subdivision applies in relation to the complying superannuation entity as a beneficiary but not as a trust estate. This Subdivision does not apply otherwise to a * complying superannuation entity that is a trust.

Amendment history: Repealed and substituted 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 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 115-215 — Assessing presently entitled beneficiaries

Purpose (1) The purpose of this section is to ensure that appropriate amounts of the trust estate’s net income attributable to the trust estate’s * capital gains are treated as a beneficiary’s capital gains when assessing the beneficiary, so: (a) the beneficiary can apply * capital losses against gains; and (b) the beneficiary can apply the appropriate * discount percentage (if any) to gains. Extra capital gains (3) If you are a beneficiary of the trust estate, for each * capital gain of the trust estate, Division 102 applies to you as if you had: (a) if the capital gain was not reduced under either step 5 of the method statement in subsection 102 ‑ 5(1) (discount capital gains) or Subdivision 152 ‑ C (small business 50% reduction)—a capital gain equal to the amount mentioned in subsection 115 ‑ 225(1); and (b) if the capital gain was reduced under either step 5 of the method statement or Subdivision 152 ‑ C but not both (even if it was further reduced by the other small business concessions)—a capital gain equal to twice the amount mentioned in subsection 115 ‑ 225(1); and (c) if the capital gain was reduced under both step 5 of the method statement and Subdivision 152 ‑ C (even if it was further reduced by the other small business concessions)—a capital gain equal to 4 times the amount mentioned in subsection 115 ‑ 225(1). Note: This subsection does not affect the amount (if any) included in your assessable income under Division 6 of Part III of the Income Tax Assessment Act 1936 because of the capital gain of the trust estate . However, Division 6E of that Part may have the effect of reducing the amount included in your assessable income under Division 6 of that Part by an amount related to the capital gain you have under this subsection. (4) For each * capital gain of yours mentioned in subsection (3): (a) if the relevant trust gain is a * discount capital gain (disregarding section 115 ‑ 20)—Division 102 also applies to you as if your capital gain were a * discount capital gain, if you are the kind of entity that can have a discount capital gain; and (b) if the relevant trust gain was reduced under Subdivision 152 ‑ C—the capital gain remaining after you apply step 5 of the method statement is reduced by 50%. Note: This ensures that your share of the trust estate’s net capital gain is taxed as if it were a capital gain you made (assuming you made the same choices about cost bases including indexation as the trustee). (4A) To avoid doubt, subsection (3) treats you as having a * capital gain for the purposes of Division 102, despite section 102 ‑ 20. Section 118 ‑ 20 does not reduce extra capital gains (5) To avoid doubt, section 118 ‑ 20 does not reduce a * capital gain that subsection (3) treats you as having for the purpose of applying Division 102.

Amendment history: Repealed and substituted 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 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 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 32 of 2008, effective 23 June 2008 | Amended by No 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 115-220 — Assessing trustees under section 98 of the Income Tax Assessment Act 1936

(1) This section applies if: (a) you are the trustee of the trust estate; and (b) on the assumption that there is a share of the income of the trust to which a beneficiary of the trust is presently entitled, you would be liable to be assessed (and pay tax) under section 98 of the Income Tax Assessment Act 1936 in relation to the trust estate in respect of the beneficiary. (2) For each * capital gain of the trust estate, increase the amount (the assessable amount ) in respect of which you are actually liable to be assessed (and pay tax) under section 98 of the Income Tax Assessment Act 1936 in relation to the trust estate in respect of the beneficiary by: (a) unless paragraph (b) applies—the amount mentioned in subsection 115 ‑ 225(1) in relation to the beneficiary; or (b) if the liability is under paragraph 98(3)(b) or subsection 98(4), and the capital gain was reduced under step 5 of the method statement in subsection 102 ‑ 5(1) (discount capital gains)—twice the amount mentioned in subsection 115 ‑ 225(1) in relation to the beneficiary. (3) To avoid doubt, increase the assessable amount under subsection (2) even if the assessable amount is nil.

Amendment history: Repealed and substituted 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 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 | Repealed and substituted by No 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 115-222 — Assessing trustees under section 99 or 99A of the Income Tax Assessment Act 1936

(1) Subsection (2) applies if: (a) you are the trustee of the trust estate; and (b) section 99A of the Income Tax Assessment Act 1936 does not apply in relation to the trust estate in relation to the relevant income year. (2) For each * capital gain of the trust estate, increase the amount (the assessable amount ) in respect of which you are liable to be assessed (and pay tax) under section 99 of the Income Tax Assessment Act 1936 in relation to the trust estate by the amount mentioned in subsection 115 ‑ 225(1). (3) Subsection (4) applies if: (a) you are the trustee of the trust estate; and (b) subsection (2) does not apply. (4) For each * capital gain of the trust estate, increase the amount (the assessable amount ) in respect of which you are liable to be assessed (and pay tax) under section 99A of the Income Tax Assessment Act 1936 in relation to the trust estate by: (a) if the capital gain was not reduced under either step 5 of the method statement in subsection 102 ‑ 5(1) (discount capital gains) or Subdivision 152 ‑ C (small business 50% reduction)—the amount mentioned in subsection 115 ‑ 225(1); and (b) if the capital gain was reduced under either step 3 of the method statement or Subdivision 152 ‑ C but not both (even if it was further reduced by the other small business concessions)—twice the amount mentioned in subsection 115 ‑ 225(1); and (c) if the capital gain was reduced under both step 3 of the method statement and Subdivision 152 ‑ C (even if it was further reduced by the other small business concessions)—4 times the amount mentioned in subsection 115 ‑ 225(1). (5) To avoid doubt, increase the assessable amount under subsection (2) or (4) even if the assessable amount is nil.

Amendment history: Inserted 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 | Repealed and substituted by No 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 115-225 — Attributable gain

(1) The amount is the product of: (a) the amount of the * capital gain remaining after applying steps 1 to 6 of the method statement in subsection 102 ‑ 5(1); and (b) your * share of the capital gain (see section 115 ‑ 227), divided by the amount of the capital gain. Special rule if net income falls short of certain amount (2) Subsection (3) applies if the net income of the trust estate (disregarding the amount of any * franking credits) for the relevant income year falls short of the sum of: (a) the * net capital gain (if any) of the trust estate for the income year; and (b) the total of all * franked distributions (if any) included in the assessable income of the trust estate for the income year (to the extent that an amount of the franked distributions remained after reducing them by deductions that were directly relevant to them). (3) For the purposes of subsection (1), replace paragraph (a) of that subsection with the following paragraph: (a) the product of: (i) the amount of the * capital gain remaining after applying steps 1 to 6 of the method statement in subsection 102 ‑ 5(1); and (ii) the * net income of the trust estate for that income year (disregarding the amount of any * franking credits), divided by the sum mentioned in subsection (2); and Special rule relating to indexation (4) Subsection (5) applies if the * capital gain has been worked out using a * cost base that includes indexation because of subsection 110 ‑ 36(1A), and the amount mentioned in subsection (1) of this section: (a) is being worked out for the purposes of subsection 115 ‑ 215(3) in circumstances where, had you: (i) made the capital gain; and (ii) * acquired and held any relevant * CGT asset in the same way as the trust estate did; that indexation could not have applied to the cost base; or (b) is being worked out for the purposes of subsection 115 ‑ 215(3) in connection with you having a resultant * discount capital gain to which section 115 ‑ 102 (about new residential dwellings) or 115 ‑ 125 (about affordable housing) applies; or (c) is being worked out for the purposes of subsection 115 ‑ 220(2) in relation to a beneficiary in circumstances where, had the beneficiary: (i) made the capital gain; and (ii) acquired and held any relevant CGT asset in the same way as the trust estate did; that indexation could not have applied to the cost base; or (d) is being worked out for the purposes of subsection 115 ‑ 220(2) in connection with a beneficiary having a resultant discount capital gain to which section 115 ‑ 102 (about new residential dwellings) or 115 ‑ 125 (about affordable housing) applies; or (e) is being worked out for the purposes of subsection 115 ‑ 222(4). Note 1: For paragraph (a) or (c), indexation under subsection 110 ‑ 36(1A) is only applicable in relation to capital gains, of individuals and trusts, that arise from a CGT event that happens on or after 1 July 2027. In addition, residency requirements for individuals apply under section 114 ‑ 25. Note 2: For paragraph (b) or (d), indexation may be able to be chosen by the trustee of a trust as an alternative to the discount percentage applying for a beneficiary’s attributed gain: see subsections 115 ‑ 102(5) and 115 ‑ 125(6). Note 3: For paragraph (e), subsection 115 ‑ 222(4) relates to assessing trustees under section 99A of the Income Tax Assessment Act 1936 . (5) For the purposes of the provision mentioned in subsection (6) of this section, determine the amount of the * capital gain remaining assuming that: (a) in working out the amount of the capital gain before any reductions under the method statement in subsection 102 ‑ 5(1) were applied, the * cost base was adjusted to remove the effect of indexation on its calculation; and (b) the assumption in paragraph (a) did not result in any changes to the application of * capital losses, previously unapplied * net capital losses or quarantined amounts (including how much of each of those was applied) under that method statement to reduce the capital gain. (6) The provision is: (a) if subsection (3) does not apply—paragraph (1)(a); or (b) if subsection (3) applies—subparagraph (1)(a)(i) (as taken to be included because of subsection (3)).

Amendment history: Repealed and substituted 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)) | Repealed and substituted by No 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 115-227 — Share of a capital gain

An entity that is a beneficiary or the trustee of a trust estate has a share of a * capital gain that is the sum of: (a) the amount of the capital gain to which the entity is * specifically entitled; and (b) if there is an amount of the capital gain to which no beneficiary of the trust estate is specifically entitled, and to which the trustee is not specifically entitled—that amount multiplied by the entity’s * adjusted Division 6 percentage of the income of the trust estate for the relevant income year.

Amendment history: Inserted by No 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4)

s 115-228 — Specifically entitled to an amount of a capital gain

(1) A beneficiary of a trust estate is specifically entitled to an amount of a * capital gain made by the trust estate in an income year equal to the amount calculated under the following formula: where: net financial benefit means an amount equal to the * financial benefit that is referable to the * capital gain (after any application by the trustee of losses and quarantined amounts, to the extent that the application is consistent with the application of capital losses and quarantined amounts against the capital gain in accordance with the method statement in subsection 102 ‑ 5(1)). share of net financial benefit means an amount equal to the * financial benefit that, in accordance with the terms of the trust: (a) the beneficiary has received, or can be reasonably expected to receive; and (b) is referable to the * capital gain (after application by the trustee of any losses and quarantined amounts, to the extent that the application is consistent with the application of capital losses and quarantined amounts against the capital gain in accordance with the method statement in subsection 102 ‑ 5(1)); and (c) is recorded, in its character as referable to the capital gain, in the accounts or records of the trust no later than 2 months after the end of the income year. Note: A trustee of a trust estate that makes a choice under section 115 ‑ 230 is taken to be specifically entitled to a capital gain. (2) To avoid doubt, for the purposes of subsection (1), something is done in accordance with the terms of the trust if it is done in accordance with: (a) the exercise of a power conferred by the terms of the trust; or (b) the terms of the trust deed (if any), and the terms applicable to the trust because of the operation of legislation, the common law or the rules of equity. (3) For the purposes of this section, in calculating the amount of the * capital gain, disregard sections 112 ‑ 20 and 116 ‑ 30 (Market value substitution rule) to the extent that those sections have the effect of increasing the amount of the capital gain. (4) In this section: quarantined amount means a quarantined amount referred to in paragraph 26 ‑ 155(1)(b) (about using or holding residential dwellings as residential accommodation).

Amendment history: Inserted by No 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 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 115-230 — Choice for resident trustee to be specifically entitled to capital gain

Purpose (1) The purpose of this section is to allow a trustee of a resident trust to make a choice that has the effect that the trustee will be assessed on a * capital gain of the trust if no trust property representing the capital gain has been paid to or applied for the benefit of a beneficiary of the trust. Trusts for which choice can be made (2) A trustee can only make a choice under this section in relation to a trust estate that is, in the income year in respect of which the choice is made, a resident trust estate (within the meaning of Division 6 of Part III of the Income Tax Assessment Act 1936 ). Circumstances in which choice can be made (3) If: (a) a * capital gain is taken into account in working out the * net capital gain of a trust for an income year; and (b) trust property representing all or part of that capital gain has not been paid to or applied for the benefit of a beneficiary of the trust by the end of 2 months after the end of the income year; the trustee may, no later than the deadline in subsection (5), make a choice that subsection (4) applies in respect of the capital gain. Consequences if trustee makes choice (4) These are the consequences if the trustee makes a choice that this subsection applies in respect of a * capital gain: (a) sections 115 ‑ 215 and 115 ‑ 220 do not apply in relation to the capital gain; (b) for the purposes of this Act, the trustee is taken to be * specifically entitled to all of the capital gain. Deadline for making choice (5) The deadline for the purposes of subsection (3) is: (a) the day 2 months after the last day of the income year; or (b) a later day allowed by the Commissioner. Note: This deadline is an exception to the general rule about choices in section 103 ‑ 25.

Amendment history: Inserted 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 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4)

s 115-250 — What this Subdivision is about

This Subdivision extends the application of Subdivision 115 ‑ C in certain circumstances where indexation is used in working out the cost base for trust estate capital gains, and Subdivision 115 ‑ C does not otherwise apply because the trust estate does not have a net capital gain. Table of sections Operative provisions 115 ‑ 255 Extended application of Subdivision 115 ‑ C—disregarding indexation

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 115-255 — Extended application of Subdivision 115 ‑ C—disregarding indexation

(1) In addition to its application under subsection 115 ‑ 210(1), Subdivision 115 ‑ C applies as set out in this section if: (a) a trust estate has one or more * capital gains that have been worked out using a * cost base that includes indexation because of subsection 110 ‑ 36(1A); and (b) that Subdivision does not apply under subsection 115 ‑ 210(1) in relation to the trust estate for an income year; and (c) that Subdivision would so apply if, in working out whether the trust estate has a * net capital gain for the income year, the following assumptions applied in relation to each of those capital gains: (i) in working out the amount of the capital gain before any reductions under the method statement in subsection 102 ‑ 5(1) were applied, the * cost base was adjusted to remove the effect of indexation on its calculation; (ii) the assumption in subparagraph (i) did not result in any changes to the application of * capital losses, previously unapplied * net capital losses or quarantined amounts (including how much of each of those was applied) under that method statement to reduce the capital gain. (2) Subdivision 115 ‑ C applies under this section as follows in relation to such a * capital gain of the trust estate (the trust gain ): (a) that Subdivision applies for the purposes of treating a beneficiary of the trust estate as having a related capital gain under subsection 115 ‑ 215(3) in circumstances where subsection 115 ‑ 225(5) would apply for working out the amount of the trust gain; (b) if paragraph (a) applies—section 115 ‑ 235 applies for such a related capital gain; (c) that Subdivision applies for the purposes of increasing the trustee’s assessable amount under subsection 115 ‑ 220(2) or 115 ‑ 222(4) in circumstances where subsection 115 ‑ 225(5) would apply for working out the amount of the trust gain. (3) The reference to the trust estate’s net income in subsection 115 ‑ 215(1) does not limit the application of section 115 ‑ 215 for those purposes. (4) To avoid doubt, subsection 115 ‑ 210(2) applies in relation to the application of Subdivision 115 ‑ C under this section. (5) To avoid doubt, a reference in a * taxation law to Subdivision 115 ‑ C or a provision of that Subdivision includes a reference to that Subdivision, or that provision (as the case requires), as it applies because of this section.

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 115-275 — What this Subdivision is about

This Subdivision allows shareholders of certain listed companies to obtain benefits similar to those conferred by discount capital gains. The benefits accrue where dividends paid by those companies represent capital gains that would be discount capital gains had they been made by an individual, a trust or a complying superannuation entity. Table of sections Operative provisions 115 ‑ 280 Deduction for certain dividends 115 ‑ 285 Meaning of LIC capital gain 115 ‑ 290 Meaning of listed investment company 115 ‑ 295 Maintaining records

Amendment history: Inserted 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))

s 115-280 — Deduction for certain dividends

(1) You can deduct an amount for a * dividend paid to you by a company (the payment company ) if: (a) you are: (i) an individual, a * complying superannuation entity, a trust or a partnership; or (ii) a * life insurance company where the dividend is in respect of * shares that are * complying superannuation assets; and (b) when the dividend is paid, either you are an Australian resident or you are an individual who is a foreign resident and carries on business in Australia at or through your permanent establishment in Australia, being a permanent establishment within the meaning of: (i) a double tax agreement (as defined in Part X of the Income Tax Assessment Act 1936 ) that relates to a foreign country and affects the individual; or (ii) subsection 6(1) of that Act, if there is no such agreement; and (ba) if, when the dividend is paid, you are an individual who is a foreign resident and has in Australia such a permanent establishment—the dividend is attributable to the permanent establishment; and (c) all or some part of the dividend is reasonably attributable to a * LIC capital gain made by a * listed investment company; and (d) in a case where the LIC capital gain was made by a company other than the payment company—the payment company was a listed investment company when it received a dividend part of which is attributable to the LIC capital gain. Note: The concession is available for LIC capital gains made directly by a listed investment company, and for LIC capital gains that company receives as a dividend through one or more other listed investment companies. (2) The amount you can deduct is: (a) 50% of your share of the amount (the attributable part ) worked out under subsection (3) if you are an individual, a trust (except a trust that is a * complying superannuation entity) or a partnership; or (b) 33 1 / 3 % of your share of the attributable part if you are a complying superannuation entity or a * life insurance company. Note 1: The listed investment company will advise you of your share of the attributable part. Note 2: If a shareholder in a listed investment company is a trust or partnership, a beneficiary of the trust or a partner in the partnership has no share of the attributable part. (3) The attributable part is worked out using this formula: where: after tax gain is the after tax * LIC capital gain. Example: A listed investment company (which is not a base rate entity) disposes of a CGT asset for $30,000. The asset had a cost base of $10,000. The capital gain is therefore $20,000. The company applies a capital loss of $10,000 against the gain. Its net capital gain is $10,000. The net capital gain is subject to tax at 30%. The after tax gain is therefore $7,000. The company pays a fully franked dividend to Daryl, one of its shareholders. It advises Daryl that his share of the attributable part of the dividend is: Daryl, being an individual, can deduct 50% of $10, which is $5. (4) An amount is included in your assessable income if: (a) a deduction is allowed under subsection (1) to a trust or a partnership; and (b) you are a beneficiary of the trust or a partner in the partnership and you are not an individual; and (c) the income of the trust or partnership is reduced by an amount because of that deduction; and (d) a part of the deduction (the reduction amount ) is reflected in your share of the net income of the trust or partnership. (5) The amount included is: (a) the reduction amount if you are a company, a trust (except a trust that is a * complying superannuation entity) or a partnership; or (b) one ‑ third of the reduction amount if you are a complying superannuation entity or a * life insurance company. Example: The Burnett Partnership received a dividend from a listed investment company. The dividend statement advised that the dividend included a $100 attributable part. The partnership deducted $50 under this section in calculating its net income. The partnership has 2 equal partners, Amy Burnett and Burnett Consulting Pty Ltd. Burnett Consulting’s assessable income includes its share of the net income of the partnership plus $25 (being that part of the $50 deduction allowed to the partnership that is reflected in the company’s share of the partnership net income). Subsections (4) and (5) do not apply to Amy because she is an individual.

Amendment history: Inserted 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 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | 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 66 of 2015, effective Sch 1 (items 6–29, 32): 22 June 2015 (s 2(1) items 3, 5) | 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 41 of 2017, effective Sch 2 (item 1), Sch 3 (items 1–21), Sch 4 (items 1–29) and Sch 5 (items 1, 2): 1 July 2016 (s 2(1) items 9, 14, 16, 18) Sch 2 (item 2) and Sch 5 (items 17, 18): repealed before commencing (s 2(1) items 10, 20) Sch 2 (item 3) and Sch 5 (items 19, 20): 1 July 2020 (s 2(1) items 11, 21) Sch 2 (item 4) and Sch 5 (items 21, 22): 1 July 2021 (s 2(1) items 12, 22) Sch 2 (item 5), Sch 3 (item 22) and Sch 4 (item 58): 19 May 2017 (s 2(1) items 13, 15, 17) Sch 5 (items 3–8): 1 July 2017 (s 2(1) item 19)

s 115-285 — Meaning of LIC capital gain

(1) A LIC capital gain is a * capital gain: (a) from a * CGT event that happens on or after 1 July 2001; and (b) that is made by a company that is a * listed investment company from a * CGT asset that is an investment to which paragraph 115 ‑ 290(1)(c) applies; and (c) that meets the requirements of sections 115 ‑ 20 and 115 ‑ 25; and (d) that is not a capital gain that could not be a * discount capital gain had it been made by an individual because of section 115 ‑ 40 or 115 ‑ 45; and (e) that is included in the * net capital gain of the company; and (f) that is reflected in the taxable income of the company for the income year in which the company had the net capital gain. Note 1: The listed investment company must be able to demonstrate that at least some part of the LIC capital gain, whether made by the company itself or by another listed investment company, remains after claiming deductions and losses against that income for the income year. Note 2: Section 115 ‑ 30 may affect the date of acquisition of a CGT asset for the purposes of sections 115 ‑ 25, 115 ‑ 40 and 115 ‑ 45. (2) However, a * capital gain made by a company is not a LIC capital gain if the company: (a) became a * listed investment company after 1 July 2001; and (b) * acquired the * CGT asset concerned before the day on which it became a listed investment company. (3) In applying subsection (2), a * CGT asset is treated as if it had been * acquired by the company before it became a * listed investment company if the asset would otherwise be treated as being acquired after that time because of one of these provisions: (a) section 70 ‑ 110 (about trading stock); (b) Subdivision 124 ‑ E or 124 ‑ F (replacement asset roll ‑ overs for exchange of * shares, units, rights or options); (ba) Subdivision 124 ‑ Q (exchange of stapled ownership interests); (c) Subdivision 126 ‑ B (same ‑ asset roll ‑ over for transfers within certain wholly ‑ owned groups).

Amendment history: Inserted 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 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 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 115-290 — Meaning of listed investment company

(1) A listed investment company is a company: (a) that is an Australian resident; and (b) * shares in which are listed for quotation on the official list of ASX Limited or an * approved stock exchange; and (c) at least 90% of the * market value of whose * CGT assets consists of investments permitted by subsection (4). (2) A company is also a listed investment company if: (a) it is a 100% subsidiary of a company that is a * listed investment company because of subsection (1); and (b) the subsidiary would be a listed investment company because of subsection (1) if it were able to comply with paragraph (1)(b). (3) This Subdivision applies to a company that does not comply with paragraph (1)(c) as if it did comply if the failure: (a) was of a temporary nature only; and (b) was caused by circumstances outside its control. (4) The permitted investments are: (a) * shares, units, options, rights or similar interests to the extent permitted by subsections (5), (6), (7) and (8); or (b) financial instruments (such as loans, debts, debentures, bonds, promissory notes, futures contracts, forward contracts, currency swap contracts and a right or option in respect of a share, security, loan or contract); or (c) an asset whose main use by the company in the course of carrying on its * business is to * derive interest, an annuity, rent, royalties or foreign exchange gains unless: (i) the asset is an intangible asset and has been substantially developed, altered or improved by the company so that its * market value has been substantially enhanced; or (ii) its main use for deriving rent was only temporary; or (d) goodwill. (5) The company can own a * 100% subsidiary if the subsidiary is a listed investment company because of subsection (2). (6) The company can own (directly or indirectly) any percentage of another * listed investment company that is not the company’s * 100% subsidiary. (7) Otherwise, the company cannot own (directly or indirectly) more than 10% of another company or trust. (8) In working out whether a company indirectly owns any part of another company or trust: (a) disregard any ownership it has indirectly through a * listed public company or a * publicly traded unit trust; and (b) if the company owns not more than 50% of another * listed investment company—disregard any ownership it has indirectly through the other company.

Amendment history: Inserted 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 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 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 76 of 2023, effective sch 2 (items 649-659), sch 3 (item 41): 20 Oct 2023 (s 2(1) items 2, 14) sch 6 (item 32): 21 Sept 2023 (s 2(1) item 22)

s 115-295 — Maintaining records

A * listed investment company must maintain records showing the balance of its * LIC capital gains available for distribution.

Amendment history: Inserted 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))

s 116-1 — What this Division is about

This Division tells you how to work out what the capital proceeds from a CGT event are. You need to know this to work out if you made a capital gain or loss from the event. Table of sections 116 ‑ 5 General rules 116 ‑ 10 Modifications to general rules General rules 116 ‑ 20 General rules about capital proceeds Modifications to general rules 116 ‑ 25 Table of modifications to the general rules 116 ‑ 30 Market value substitution rule: modification 1 116 ‑ 35 Companies and trusts that are not widely held 116 ‑ 40 Apportionment rule: modification 2 116 ‑ 45 Non ‑ receipt rule: modification 3 116 ‑ 50 Repaid rule: modification 4 116 ‑ 55 Assumption of liability rule: modification 5 116 ‑ 60 Misappropriation rule: modification 6 Special rules 116 ‑ 65 Disposal etc. of a CGT asset the subject of an option 116 ‑ 70 Option requiring both acquisition and disposal etc. 116 ‑ 75 Special rule for CGT event happening to a lease 116 ‑ 80 Special rule if CGT asset is shares or an interest in a trust 116 ‑ 85 Section 47A of 1936 Act applying to rolled ‑ over asset 116 ‑ 95 Company changes residence from an unlisted country 116 ‑ 100 Gifts of property 116 ‑ 105 Conservation covenants 116 ‑ 110 Roll ‑ overs for merging superannuation funds 116 ‑ 115 Farm ‑ in farm ‑ out arrangements 116 ‑ 120 Disposals of assets involving look ‑ through earnout rights

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 116-5 — General rules

Section 116 ‑ 20 sets out the general rules about capital proceeds. They are relevant to each CGT event that is listed in the table in section 116 ‑ 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))

s 116-10 — Modifications to general rules

(1) There are 6 modifications to the general rules that may be relevant. The table in section 116 ‑ 25 lists which ones may be relevant to each CGT event listed in the table. Explanation of modifications (2) The first is a market value substitution rule. It is relevant if: • you receive no capital proceeds from a CGT event; or • some or all of the capital proceeds cannot be valued; or • you did not deal at arm’s length with another entity in connection with the event. (3) The second is an apportionment rule. It is relevant if a payment you receive in connection with a transaction relates in part only to a CGT event. Example: You sell 3 CGT assets for a total of $100,000. The $100,000 needs to be apportioned between the 3 assets. (4) The third is a non ‑ receipt rule. It is relevant if you do not receive, or are not likely to receive, some or all of the capital proceeds from a CGT event. (5) The fourth is a repaid rule. It is relevant if you are required to repay some or all of the capital proceeds from a CGT event. (6) The fifth is relevant only if another entity assumes a liability in connection with a CGT event. (7) The sixth relates to misappropriation by an employee or agent. It is relevant if your employee or agent misappropriates all or part of the capital proceeds from a CGT event. Note 1: Also, these provisions of the Income Tax Assessment Act 1936 modify capital proceeds: (a) section 23B (undistributed FIF attribution income on disposal of an interest in a FIF); (b) sections 159GZZZF and 159GZZZG (cancellation of shares in a holding company); (c) sections 159GZZZQ and 159GZZZS (buy ‑ backs of shares); (d) sections 401, 422, 423 and 461 (CFCs). Note 2: Section 230 ‑ 505 of this Act (Division 230 financial arrangement as consideration for provision or acquisition of a thing) also modifies capital proceeds.

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 38 of 2008, effective Schedule 1, Schedules 3–6, Schedule 7 (items 1–3, 5), Schedule 8 (items 1–11), Schedule 9 (items 2–4), Schedule 10, Schedule 12 and Schedule 13: 24 June 2008 Schedule 8 (items 12–21): 1 July 2012 | 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 114 of 2010, effective Schedule 1 (items 40–86, 93(1), 95): Royal Assent

s 116-20 — General rules about capital proceeds

(1) The capital proceeds from a * CGT event are the total of: (a) the money you have received, or are entitled to receive, in respect of the event happening; and (b) the * market value of any other property you have received, or are entitled to receive, in respect of the event happening (worked out as at the time of the event). Note 1: The timing rules for each event are in Division 104. Note 2: In some situations you are treated as having received money or other property, or being entitled to receive it: see section 103 ‑ 10. Note 3: If you dispose of shares in a buy ‑ back, the capital proceeds are worked out under Division 16K of the Income Tax Assessment Act 1936 . (2) This table sets out what the capital proceeds from * CGT events F1, F2, H2 and K9 are: General rules about capital proceeds Event number Description of event: The capital proceeds are: F1 Granting, renewing or extending a lease Any premium paid or payable to you for the grant, renewal or extension F2 Granting, renewing or extending a long ‑ term lease The greatest of: (a) the * market value of the estate in fee simple or head lease (worked out when you grant, renew or extend the lease); and (b) what would have been that market value if you had not granted, renewed or extended the lease; and (c) any premium paid or payable to you for the grant, renewal or extension H2 Receipt for event relating to a CGT asset The money or other consideration you received, or are entitled to receive, because of the act, transaction or event K9 Entitlement to receive payment of a * carried interest The amount of the payment, to the extent that it is a payment of the * carried interest (3) In working out the * market value of the property the subject of the grant, renewal or extension of a long ‑ term lease: (a) include the market value of any building, part of a building, structure or improvement that is treated as a separate * CGT asset from the property; and (b) disregard any * depreciating assets for whose decline in value the lessor has deducted or can deduct an amount under this Act. Note: Subdivision 108 ‑ D sets out when a building, structure or improvement is treated as a separate CGT asset. (4) In working out the amount of any premium paid or payable to the lessor for the grant, renewal or extension of a long ‑ term lease, disregard any part of it that is attributable to a * depreciating asset of that kind. The payment of any premium can include giving property: see section 103 ‑ 5. (5) In working out the proceeds of a * CGT event that is a * supply, disregard the amount of your * net GST (if any) on the supply.

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

s 116-25 — Table of modifications to the general rules

There are 6 modifications to the general rules that may be relevant to a * CGT event. This table tells you: • each * CGT event for which the general rules about * capital proceeds are relevant; and • the modifications that can apply to that event; and • any special rules that apply to that event. Capital proceeds modifications Event number Description of event: Only these modifications can apply: Special rules: A1 Disposal of a CGT asset 1, 2, 3, 4, 5, 6 If the * disposal is because another entity exercises an option: see section 116 ‑ 65 If the disposal is of * shares or an interest in a trust: see section 116 ‑ 80 If the disposal is a gift for which a section 30 ‑ 212 valuation is obtained: see section 116 ‑ 100 If a roll ‑ over under Subdivision 310 ‑ D applies: see section 116 ‑ 110 If the disposal is a disposal of part of an interest in a * mining, quarrying or prospecting right under a * farm ‑ in farm ‑ out arrangement: see section 116 ‑ 115 If the disposal involves a * look ‑ through earnout right: see section 116 ‑ 120 B1 Use and enjoyment before title passes 1, 2, 3, 4, 5, 6 None C1 Loss or destruction of a CGT asset 2, 3, 4, 6 None C2 Cancellation, surrender and similar endings 1, 2, 3, 4, 6 See sections 116 ‑ 75, 116 ‑ 80, 116 ‑ 110 and 116 ‑ 115 C3 End of option to acquire shares etc. 2, 3, 4, 6 None D1 Creating contractual or other rights 1, 2, 3, 4, 6 None D2 Granting an option 1, 2, 3, 4, 6 See section 116 ‑ 70 D3 Granting a right to income from mining 1, 2, 3, 4, 6 None D4 Entering into a conservation covenant 2, 3, 4, 5, 6 116 ‑ 105 E1 Creating a trust over a CGT asset 1, 2, 3, 4, 5, 6 None E2 Transferring a CGT asset to a trust 1, 2, 3, 4, 5, 6 If a roll ‑ over under Subdivision 310 ‑ D applies: see section 116 ‑ 110 E8 Disposal by beneficiary of capital interest 1, 2, 3, 4, 5, 6 See section 116 ‑ 80 F1 Granting a lease 2, 3, 4, 6 None F2 Granting a long ‑ term lease 2, 3, 4, 6 None F4 Lessee receives payment for changing lease 2, 3, 4, 6 None F5 Lessor receives payment for changing lease 2, 3, 4, 6 None H2 Receipt for event relating to a CGT asset 2, 3, 4, 6 None K6 Pre ‑ CGT shares or trust interest 1, 2, 3, 4, 5, 6 None K9 Entitlement to receive payment of a * carried interest 2, 3, 4, 6 None

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 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 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 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 38 of 2008, effective Schedule 1, Schedules 3–6, Schedule 7 (items 1–3, 5), Schedule 8 (items 1–11), Schedule 9 (items 2–4), Schedule 10, Schedule 12 and Schedule 13: 24 June 2008 Schedule 8 (items 12–21): 1 July 2012 | 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 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 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 116-30 — Market value substitution rule: modification 1

No capital proceeds (1) If you received no * capital proceeds from a * CGT event, you are taken to have received the * market value of the * CGT asset that is the subject of the event. (The market value is worked out as at the time of the event.) Example: You give a CGT asset to another entity. You are taken to have received the market value of the CGT asset. There are capital proceeds (2) The * capital proceeds from a * CGT event are replaced with the * market value of the * CGT asset that is the subject of the event if: (a) some or all of those proceeds cannot be valued; or (b) those capital proceeds are more or less than the market value of the asset and: (i) you and the entity that * acquired the asset from you did not deal with each other at * arm’s length in connection with the event; or (ii) the CGT event is CGT event C2 (about cancellation, surrender and similar endings). (The market value is worked out as at the time of the event.) (2A) Subsection (2) does not apply if there is a partial roll ‑ over for the * CGT event because of section 124 ‑ 150. (2B) Subsection (2) does not apply to a situation that would otherwise be covered by paragraph (2)(b) if the * CGT event is * CGT event C2 (about cancellation, surrender and similar endings) and the * CGT asset that is the subject of the event is: (a) a * share in a company that has at least 300 * members and is not a company that is covered by section 116 ‑ 35; or (b) a unit in a unit trust that has at least 300 unit holders and is not a trust that is covered by section 116 ‑ 35. Note: So, for one of these assets, the capital proceeds for the cancellation will be what you actually received. (2C) Subsection (2) does not apply if: (a) you are a * complying superannuation fund, a * complying approved deposit fund or a * pooled superannuation trust; and (b) the * capital proceeds from the * CGT event exceed the * market value of the * CGT asset; and (c) assuming the capital proceeds were your * statutory income, the proceeds would be * non ‑ arm’s length income. Market value for CGT events C2 and D1 (3) Subsection (1) does not apply to: (a) these examples of * CGT event C2: (i) the expiry of a * CGT asset you own; (ii) the cancellation of your * statutory licence; or (b) * CGT event D1 (about creating contractual or other rights). (3A) If you need to work out the * market value of a * CGT asset that is the subject of * CGT event C2, work it out as if the event had not occurred and was never proposed to occur. Example: A company cancels shares you own in it. You work out the market value of the shares by disregarding the cancellation. CGT assets the subject of certain events (4) To avoid doubt, the * CGT asset that is the subject of a * CGT event specified in this table is the asset so specified. * CGT assets the subject of certain events For this * CGT event: This asset is the subject of the event: D1 the right you created D2 the option you granted D3 the right you granted E8 your interest or part interest in the trust capital K6 the * share or interest you * acquired before 20 September 1985 Carried interests (5) This section does not apply to * CGT event A1 or C2 to the extent that the CGT event is constituted by ceasing to own: (a) the * carried interest of a * general partner in a * VCLP, an * ESVCLP or an * AFOF or a * limited partner in a * VCMP; or (b) an entitlement to receive a payment of such a carried interest. Note: 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 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 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 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 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 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 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 55 of 2007, effective 12 Apr 2007 | Amended by No 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 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 38 of 2008, effective Schedule 1, Schedules 3–6, Schedule 7 (items 1–3, 5), Schedule 8 (items 1–11), Schedule 9 (items 2–4), Schedule 10, Schedule 12 and Schedule 13: 24 June 2008 Schedule 8 (items 12–21): 1 July 2012 | 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 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 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 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 141 of 2020, effective Sch 1 (item 1) and Sch 4 (items 82–101): 1 Jan 2021 (s 2(1) items 2, 7) Sch 4 (item 146): 18 Dec 2020 (s 2(1) item 16)

s 116-35 — Companies and trusts that are not widely held

Coverage (1) A company is covered by this section if subsection (3) or (5) applies to the company. (2) A unit trust is covered by this section if subsection (4) or (5) applies to the trust. Concentrated ownership (3) This subsection applies to a company if an individual owns, or up to 20 individuals own between them, directly or indirectly (through one or more interposed entities) and for their own benefit, * shares in the company: (a) carrying * fixed entitlements to at least 75% of the company’s income or at least 75% of the company’s capital; or (b) carrying at least 75% of the voting power in the company. (4) This subsection applies to a trust if an individual owns, or up to 20 individuals own between them, directly or indirectly (through one or more interposed entities) and for their own benefit, units in the trust: (a) carrying * fixed entitlements to at least 75% of the trust’s income or at least 75% of the trust’s capital; or (b) if unit holders of the trust have a right to vote in respect of activities of the trust—carrying at least 75% of the voting power in the trust. Possible variation of rights (5) This subsection applies to a company or trust if, because of: (a) any provision in the entity’s constituent document, or in any contract, agreement or instrument: (i) authorising the variation or abrogation of rights attaching to any of the * shares or units in the entity; or (ii) relating to the conversion, cancellation, extinguishment or redemption of any of those shares or units; or (b) any contract, * arrangement, option or instrument under which a person has power to acquire any of those shares or units; or (c) any power, authority or discretion in a person in relation to the rights attaching to any of those shares or units; it is reasonable to conclude that the rights attaching to any of those shares or units are capable of being varied or abrogated in such a way (even if they are not in fact varied or abrogated in that way) that, directly or indirectly, subsection (3) or (4) would apply to the entity. Single individual (6) For the purposes of subsections (3) and (4), all of the following are taken to be a single individual: (a) an individual, whether or not the individual holds * shares or units in the entity concerned; (b) the individual’s * associates; (c) for any shares or units in respect of which other individuals are nominees of the individual or of the individual’s associates—those other individuals.

Amendment history: Inserted by No 38 of 2008, effective Schedule 1, Schedules 3–6, Schedule 7 (items 1–3, 5), Schedule 8 (items 1–11), Schedule 9 (items 2–4), Schedule 10, Schedule 12 and Schedule 13: 24 June 2008 Schedule 8 (items 12–21): 1 July 2012

s 116-40 — Apportionment rule: modification 2

(1) If you receive a payment in connection with a transaction that relates to more than one * CGT event, the capital proceeds from each event are so much of the payment as is reasonably attributable to that event. Example: You sell a block of land and a boat for a total of $100,000. This transaction involves 2 CGT events. The $100,000 must be divided among the 2 events. The capital proceeds from the disposal of the land are so much of the $100,000 as is reasonably attributable to it. The rest relates to the boat. (2) If you receive a payment in connection with a transaction that relates to one * CGT event and something else, the capital proceeds from the event are so much of the payment as is reasonably attributable to the event. Example: You are an architect. You receive $70,000 for selling a block of land and giving advice to the new owner. This transaction involves one CGT event: the disposal of the land. The capital proceeds from the disposal of the land is so much of the $70,000 as is reasonably attributable to that disposal. (3) The payment can include giving property: see section 103 ‑ 5.

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

s 116-45 — Non ‑ receipt rule: modification 3

(1) The * capital proceeds from a * CGT event are reduced if: (a) you are not likely to receive some or all (the unpaid amount ) of those proceeds; and (b) this is not because of anything you (or your * associate) have done or omitted to do; and (c) you took all reasonable steps to get the unpaid amount paid. The capital proceeds are reduced by the unpaid amount. Note: This rule exists because the general rules treat you as having received an amount when you are entitled to receive it. Example You sell a painting to another entity for $5,000 (the capital proceeds). You agree to accept monthly instalments of $100. You receive $2,000, but then the other entity stops making payments. It becomes clear that you are not likely to receive the remaining $3,000. The capital proceeds are reduced to $2,000. (2) There is a further consequence if: (a) those proceeds are reduced by the unpaid amount; but (b) you later receive a part of that amount. Those proceeds are increased by that part. (3) This Part and Part 3 ‑ 3 apply to the debt owed to you (the unpaid amount) as if it were not 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)) | 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 116-50 — Repaid rule: modification 4

(1) The * capital proceeds from a * CGT event are reduced by: (a) any part of them that you repay; or (b) any compensation you pay that can reasonably be regarded as a repayment of part of them. However, the capital proceeds are not reduced by any part of the payment that you can deduct. Example: You sell a block of land for $50,000 (the capital proceeds). The purchaser later finds out that you misrepresented a term in the contract. The purchaser sues you and the court orders you to pay $10,000 in damages to the purchaser. The capital proceeds are reduced by $10,000. (2) The payment can include giving property: see section 103 ‑ 5.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 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 116-55 — Assumption of liability rule: modification 5

The * capital proceeds from a * CGT event are increased if another entity * acquires the * CGT asset (the subject of the event) subject to a liability by way of security over the asset. They are increased by the amount of the liability the other entity assumes. Example: You sell land for $150,000. You receive $50,000 (the capital proceeds) and the buyer becomes responsible for a $100,000 liability under an outstanding mortgage. The capital proceeds are increased by $100,000 to $150,000.

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 116-60 — Misappropriation rule: modification 6

(1) The * capital proceeds from a * CGT event are reduced if your employee or * agent misappropriates (whether by theft, embezzlement, larceny or otherwise) all or part of those proceeds. Note: This rule exists because the general rules treat you as having received an amount when you are entitled to receive it. (2) The * capital proceeds are reduced by the amount misappropriated. (3) There is a further consequence if: (a) those proceeds are reduced by the amount misappropriated; and (b) you later receive an amount as * recoupment of all or part of the amount misappropriated. Those proceeds are increased by the amount received. (4) This Part and Part 3 ‑ 3 apply to the debt owed to you (the amount misappropriated) as if it were not a * CGT asset. (5) Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if: (a) you discover the misappropriation, or you receive an amount as * recoupment of all or part of the amount misappropriated, after you lodged your * income tax return for the income year; and (b) the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.

Amendment history: Inserted by No 38 of 2008, effective Schedule 1, Schedules 3–6, Schedule 7 (items 1–3, 5), Schedule 8 (items 1–11), Schedule 9 (items 2–4), Schedule 10, Schedule 12 and Schedule 13: 24 June 2008 Schedule 8 (items 12–21): 1 July 2012

s 116-65 — Disposal etc. of a CGT asset the subject of an option

(1) This section applies if: (a) you granted, renewed or extended an option to create (including grant or issue) or * dispose of a * CGT asset; and (b) another entity exercises the option; and (c) because of the exercise of the option, you create (including grant or issue) or dispose of the CGT asset. (2) The * capital proceeds from the creation (including grant or issue) or disposal include any payment you received for granting, renewing or extending the option. (3) The payment can include giving property: see section 103 ‑ 5.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 116-70 — Option requiring both acquisition and disposal etc.

(1) This section applies if: (a) you granted, renewed or extended an option; and (b) the option requires you both to * acquire, and to create (including grant or issue) or * dispose of, a * CGT asset. (2) The option is treated as 2 separate options and half of the * capital proceeds from the grant, renewal or extension is attributed to each 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)) | Repealed and substituted by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 116-75 — Special rule for CGT event happening to a lease

The * capital proceeds from the expiry, surrender or forfeiture of a lease include any payment (because of the lease ending) by the lessor to the lessee for expenditure of a capital nature incurred by the lessee in making improvements to the leased property. The payment or expenditure can include giving property: see section 103 ‑ 5.

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

s 116-80 — Special rule if CGT asset is shares or an interest in a trust

(1) This section sets out what happens if: (a) there is a fall in the * market value of a * personal use asset (other than a car, motor cycle or similar vehicle) or a * collectable of a company or trust; and (b) * CGT event A1, C2 or E8 happens to: (i) * shares you own in the company (or in a company that is a member of the same * wholly ‑ owned group); or (ii) an interest you have in the trust. Note: The full list of CGT events is in section 104 ‑ 5. (2) The * capital proceeds from the event are replaced with the * market value of the * shares, or the interest in the trust. The market value is worked out as at the time of the event as if the fall in market value of the * personal use asset or * collectable had not occurred. Note: You may also make a collectable loss: see CGT event K5.

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

s 116-85 — Section 47A of 1936 Act applying to rolled ‑ over asset

(1) You reduce the * capital proceeds from a * CGT event that happens in relation to a * CGT asset you have if the conditions in this table are satisfied. Conditions for reduction Item Condition 1 You must have * acquired the asset from a company or * CFC 2 Either: (a) the company obtained a roll ‑ over for the * CGT event that resulted in your * acquisition of the asset; or (b) the * CFC obtained a roll ‑ over for that event in applying Division 7 of Part X of the Income Tax Assessment Act 1936 for the purpose of working out the * attributable income of a company in relation to any entity except a roll ‑ over under Subdivision 124 ‑ J (about Crown leases), 124 ‑ K (about depreciating assets) or 124 ‑ L (about prospecting and mining entitlements) 3 The company or * CFC is taken, under section 47A of the Income Tax Assessment Act 1936 , to have paid you a dividend in relation to that event and some or all of the dividend is included in your assessable income under section 44 of that Act Note: For roll ‑ overs: see Divisions 122, 124 and 126. (2) The reduction is the lesser of: (a) the amount of the dividend; and (b) the amount of any * capital gain that, apart from the roll ‑ over, the company or * CFC would have made from the * CGT event if its * capital proceeds from the event had been the asset’s * market value (at the time of the event). Note: This section is disregarded in calculating the attributable income of a CFC: see section 410 of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 96 of 2004, effective 29 June 2004

s 116-95 — Company changes residence from an unlisted country

(1) This section sets out what happens if: (a) a * CFC ceases at a time (the residency change time ) to be a resident of an * unlisted country and becomes a resident of a * listed country; and (aa) subsection 457(3) of the Income Tax Assessment Act 1936 does not apply to the change of residence; and (b) because of the change in its residency status, an amount is included in an entity’s assessable income under section 457 of the Income Tax Assessment Act 1936 (including because of paragraph 58(1)(d) of the Taxation Laws Amendment (Foreign Income) Act 1990 ); and (c) a * CGT event happens in relation to a * CGT asset (the CFC asset ) that is * taxable Australian property and that the CFC owned since the residency change time. (2) If the conditions in subsection (3) are satisfied, the * capital proceeds from the * CGT event are reduced by the amount worked out under subsection (4). If the conditions in subsection (5) are satisfied, those capital proceeds are increased by the amount worked out under subsection (6). Reduction of capital proceeds (3) If all the * CFC’s assets were * disposed of at the residency change time for their * market values in the circumstances mentioned in subparagraph 457(2)(a)(ii) of the Income Tax Assessment Act 1936 : (a) * distributable profits of the CFC of a particular amount (the distributable profit amount ) would be created, or its distributable profits would be increased by an amount (also the distributable profit amount ); and (b) the CFC would have made a profit (the CFC asset profit ) on the disposal of the CFC asset. (4) The * capital proceeds are reduced by: where: total asset profits is the sum of the profits that the CFC would have made if all its assets were * disposed of at the residency change time for their * market values (ignoring disposals that would not result in a profit). Increase in capital proceeds (5) If all the * CFC’s assets were * disposed of at the residency change time for their * market values in the circumstances mentioned in subparagraph 457(2)(a)(ii) of the Income Tax Assessment Act 1936 : (a) the * distributable profits of the CFC would be reduced by an amount (the distributable profit reduction amount ); and (b) the CFC would have made a loss (the CFC asset loss ) on the disposal of the CFC asset. (6) The * capital proceeds are increased by: where: total asset losses is the sum of the losses that the CFC would have made if all its assets were * disposed of at the residency change time for their * market values (ignoring disposals that would not result in a loss). Note: This section is disregarded in calculating the attributable income of a CFC: see section 410 of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | Amended by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | Amended by No 168 of 2006, effective Schedule 3 (items 3–5): 13 Dec 2005 Remainder: Royal Assent

s 116-100 — Gifts of property

(1) If CGT event A1 is the giving of a gift of property by you for which a valuation under section 30 ‑ 212 is obtained, you may choose that the * capital proceeds from the event are replaced with the value of the property as determined under the valuation. (2) You can only make this choice if the valuation was made no more than 90 days before or after the CGT event.

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 116-105 — Conservation covenants

If * CGT event D4 happens because you enter into a * conservation covenant over land you own and you can deduct an amount under Division 31 because you enter into the covenant, the * capital proceeds from the event are the amount you can deduct. Note: To get a deduction under Division 31, you must not receive money, property or other material benefit for entering into the covenant.

Amendment history: Inserted by No 167 of 2001, effective Sch 4 (items 8–10) and Sch 7 and 8: 1 Oct 2001 (s 2(1))

s 116-110 — Roll ‑ overs for merging superannuation funds

If a roll ‑ over is chosen under Subdivision 310 ‑ D in relation to * CGT event A1, C2 or E2, the * capital proceeds of the transferring entity (within the meaning of that Division) from the event are the amount worked out under subsection 310 ‑ 55(1) or 310 ‑ 60(3).

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 116-115 — Farm ‑ in farm ‑ out arrangements

(1) If: (a) * CGT event A1 is the * disposal of part of your interest in a * mining, quarrying or prospecting right; and (b) the part is disposed of under a * farm ‑ in farm ‑ out arrangement; and (c) you have received an * exploration benefit in respect of the event happening; in working out the * capital proceeds for the CGT event, treat as zero the * market value of the exploration benefit. (2) If: (a) * CGT event C2 arises as a result of an * exploration benefit being provided to you; and (b) the exploration benefit is provided under a * farm ‑ in farm ‑ out arrangement; in working out the * capital proceeds for the CGT event, treat as zero the * market value of the exploration benefit.

Amendment history: Inserted 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)

s 116-120 — Disposals of assets involving look ‑ through earnout rights

Consequences for capital proceeds (1) If * CGT event A1 happens because you * dispose of a * CGT asset, your * capital proceeds from the disposal: (a) do not include the value of any * look ‑ through earnout right relating to the CGT asset and the disposal; and (b) are increased by any * financial benefit that you receive under such a look ‑ through earnout right; and (c) are reduced by any financial benefit that you provide 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 in relation to the * CGT event if: (a) 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 the income year in which the * CGT event happens; 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 the income year in which the * CGT event happens; 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 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 118-1 — What this Division is about

This Division sets out various exemptions for many capital gains and losses. There are other provisions that provide exemptions from CGT liability, for example, Division 104 (exceptions from CGT events), Division 152 (small business relief) and Division 50 (exempt entities). Note 1: There are also these exemptions in the Income Tax Assessment Act 1936 : • section 23AH (about foreign branch gains and losses of companies); • section 26BC (about securities lending arrangements); • section 121AS (about demutualisation of insurance companies); • sections 121EL, 121ELA and 121ELB (about offshore banking units); • section 159GZZZN (about buy ‑ back and cancellation of shares); • section 315 (about superannuation and related businesses); • section 408 (about calculating the attributable income of a CFC). Note 2: There are also exemptions in Division 54. Note 3: There are also exemptions in Divisions 315 and 316 (about demutualisation of certain insurers).

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 93 of 1999, effective Schedule 4 (item 24): 16 Apr 1998 Remainder: Royal Assent | 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 139 of 2002, effective 19 Dec 2002 | Amended by No 101 of 2004, effective s. 4, Schedule 1 (items 2–4), Schedule 9, Schedule 10 (items 7–37) and Schedule 11 (items 144–146): Royal Assent Sch 2 and Sch 7 (items 1–8): 30 June 2003 (s 2(1) items 3, 8) Sch 3: 1 July 2003 (s 2(1) item 4) Sch 11 (item 35): 30 June 2000 (s 2(1) item 13) Sch 11 (items 52–59, 88, 89): 1 July 2000 (s 2(1) item 14) Sch 11 (items 141–143): 1 July 2001 (s 2(1) item 16) | Amended by No 15 of 2007, effective s 4, Sch 1 (items 150–236, 240, 242–260, 406(1)–(3)), Sch 3 (items 8–44, 66) and Sch 4 (items 1–8): 15 Mar 2007 (s 2(1) items 1, 2, 6, 8, 9) Sch 2: 12 Apr 2007 (s 2(1) item 3) | Amended by No 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 53 of 2015, effective Sch 1 (items 9–17, 19): 1 July 2016 (s 2)

s 118-5 — Cars, motor cycles and valour decorations

A * capital gain or * capital loss you make from any of these * CGT assets is disregarded: (a) a * car, motor cycle or similar vehicle; (b) a decoration awarded for valour or brave conduct (unless you paid money or gave any other property for 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))

s 118-10 — Collectables and personal use assets

(1) A * capital gain or * capital loss you make from a * collectable is disregarded if the first element of its * cost base, or the first element of its * cost if it is a * depreciating asset, is $500 or less. Example: On 10 July 2001, Gayle buys a print for $450 and hangs it in her home. On 30 November 2001 she takes the print to her office and hangs it in the lobby. Gayle self assesses the effective life of the print to be 7 years. Gayle sells the print to Anna for $700 on 2 January 2002. How much can Gayle deduct for the 2001 ‑ 02 income year? The cost of the print is $450. Gayle chooses to use the prime cost method to calculate its decline in value. The print’s decline in value is: = $31 Gayle can deduct $6 as the taxable use portion of the decline in value under Division 40: Due to the balancing adjustment event that occurred on 2 January 2002, $54 is included in Gayle’s assessable income for the 2001 ‑ 02 income year under section 40 ‑ 285. The amount is reduced for non ‑ taxable use by section 40 ‑ 290. A capital gain of $202 is disregarded under this section because the asset is a collectable acquired for less than $500. (2) However, there is a special rule if the * collectable is an interest in one of these * CGT assets: (a) * artwork, jewellery, an antique, or a coin or medallion; (b) a rare folio, manuscript or book; (c) a postage stamp or first day cover. A * capital gain or * capital loss you make from the interest is disregarded only if the * market value of the asset (when you * acquired the interest) is $500 or less. Note: If you last acquired the interest before 16 December 1995, a capital gain or loss is disregarded if you acquired the interest for $500 or less: see section 118 ‑ 10 of the Income Tax (Transitional Provisions) Act 1997 . (3) A * capital gain you make from a * personal use asset, or part of the asset, is disregarded if the first element of the asset’s * cost base, or the first element of its * cost if it is a * depreciating asset, is $10,000 or less. Note: A capital loss you make from a personal use asset is disregarded: see subsection 108 ‑ 20(1).

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

s 118-12 — Assets used to produce exempt income etc.

(1) A * capital gain or * capital loss you make from a * CGT asset that you used solely to produce your * exempt income or * non ‑ assessable non ‑ exempt income is disregarded. (2) However, the exemption does not apply if the asset was used to gain or produce an amount that is * non ‑ assessable non ‑ exempt income because of: (a) any of these provisions of this Act: (i) section 59 ‑ 15 (mining payments); (ia) section 59 ‑ 35 (amounts that would be mutual receipts but for prohibition on distributions to members or issue of MCIs); (ii) subsection 70 ‑ 90(2) (disposing of trading stock outside the ordinary course of business); (iii) section 86 ‑ 30 (income of a personal services entity); (iv) subsection 86 ‑ 35(1) (payment by a personal services entity); (v) subsection 86 ‑ 35(2) (share of personal services entity’s net income); (vi) section 240 ‑ 40 (treatment of arrangement payments); (via) section 242 ‑ 40 (about luxury car lease payments); (vib) section 768 ‑ 5 (foreign equity distributions on participation interests); (vii) section 802 ‑ 15 (foreign residents—exempting CFI from Australian tax); (viii) section 840 ‑ 815 (foreign residents—final withholding tax on managed investment trust income); or (b) any of these provisions of the Income Tax Assessment Act 1936 : (i) section 23AH (foreign branch profits of Australian companies); (ii) section 23AI (amounts paid out of attributed income); (iv) section 23AK (attributed foreign investment fund income); (v) subsection 23L(1) (fringe benefits); (vi) subsection 99B(2A) (attributed trust income); (vii) section 128D (dividends, royalties and interest subject to withholding tax); (viii) subsection 271 ‑ 105(3) in Schedule 2F (amounts subject to family trust distribution tax). Note: These provisions make amounts non ‑ assessable non ‑ exempt income to prevent them being double taxed rather than to remove them entirely from the taxation system. Therefore, the policy reason for disregarding gains and losses does not apply to assets used to produce those amounts.

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 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 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 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 32 of 2008, effective 23 June 2008 | 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 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 37 of 2019, effective Sch 2 (items 17–22): 6 Apr 2019 (s 2(1) item 1)

s 118-13 — Shares in a PDF

A * capital gain or * capital loss you make from a * CGT event happening in relation to * shares in a * PDF is disregarded.

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

s 118-15 — Registered emissions units

(1) A * capital gain or * capital loss you make from a * registered emissions unit is disregarded. (3) A * capital gain or * capital loss you make from a right to receive an * Australian carbon credit unit is disregarded.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Repealed by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Inserted 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 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)

s 118-20 — Reducing capital gains if amount otherwise assessable

(1) A * capital gain you make from a * CGT event is reduced if, because of the event, a provision of this Act (outside of this Part) includes an amount (for any income year) in: (a) your assessable income or * exempt income; or (b) if you are a partner in a partnership, the assessable income or exempt income of the partnership. (1A) Subsection (1) applies to an amount that, under a provision of this Act (outside of this Part), is included in: (a) your assessable income or * exempt income; or (b) if you are a partner in a partnership, the assessable income or exempt income of the partnership; in relation to a * CGT asset as if it were so included because of the * CGT event referred to in that subsection if the amount would also be taken into account in working out the amount of a * capital gain you make. Note: An example is an amount assessable under Division 16E of Part III of the Income Tax Assessment Act 1936 , which deals with accruals taxation of certain securities. (1B) The rule in subsection (1) does not apply to: (a) an amount that is taken to be a dividend under section 159GZZZP of the Income Tax Assessment Act 1936 (which relates to buy ‑ backs of * shares); or (b) an amount included in assessable income under subsection 207 ‑ 20(1), 207 ‑ 35(1) or 207 ‑ 35(3) of this Act (which relate to franked distributions). (2) The gain is reduced to zero if it does not exceed: (a) the amount included; or (b) if you are a partner, your share (the partner’s share ) of the amount included in the assessable income or * exempt income of the partnership (calculated according to your entitlement to share in the partnership net income or loss). Example: Liz bought some land in 1990, as part of a profit ‑ making scheme. In December 1998 she sells it. Her profit from the sale is $40,000 and is included in her assessable income under section 6 ‑ 5 (about ordinary income). Suppose she made a capital gain from the sale of $30,000. It is reduced to zero because it is does not exceed the amount included. (3) The gain is reduced by the amount included, or the amount of the partner’s share, if the gain exceeds that amount. Note: These rules are modified for complying superannuation funds that become non ‑ complying and for foreign superannuation funds that become Australian superannuation funds: see Division 295. (4) A * capital gain you make from a * CGT event is reduced by the extent that a provision of this Act (except sections 59 ‑ 40 and 316 ‑ 255) treats: (a) an amount of your * ordinary income or * statutory income from the event as being * non ‑ assessable non ‑ exempt income; or (b) if you are a partner, your share of the ordinary income or * statutory income of the partnership from the event (calculated according to your entitlement to share in the partnership net income or loss) as being non ‑ assessable non ‑ exempt income of the partnership. (4A) A * capital gain the trustee of a * superannuation fund makes from a * CGT event happening in relation to a * CGT asset in an income year is reduced if the asset’s * market value was taken into account in working out the fund’s income from previous years under section 295 ‑ 325 or 295 ‑ 330. (4B) The gain is reduced to zero if it does not exceed the amount that would have been the * capital gain from the * CGT event if the * capital proceeds from the event were the asset’s * market value that was taken into account in working out that net previous income. If the gain exceeds that amount, it is reduced by that amount. Exceptions (5) The gain is not reduced if an amount is included in your assessable income, or the assessable income of the partnership, for any income year because of a balancing adjustment. (6) The gain is not reduced if an amount is included in your * non ‑ assessable non ‑ exempt income under section 768 ‑ 5 (about foreign equity distributions on participation interests) because a company makes a * foreign equity distribution that is: (a) debited against a * share capital account of the company; or (c) debited against an asset revaluation reserve of the company; or (d) directly or indirectly attributable to amounts transferred from such an account or reserve of the company.

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)) | Amended by No 176 of 1999, effective Sch 3: 1 July 2000 (s 2(9)) | 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 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 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3) | 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 91 of 2008, effective Schedule 1: Royal Assent | 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 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 110 of 2021, effective Sch 1 and Sch 2 (items 8–13): 1 Oct 2021 (s 2(1) item 2)

s 118-21 — Carried interests

CGT events relating to carried interests not to be treated as income (1) The modifications in subsections (2) and (3) apply if * CGT event K9 happens in relation to your entitlement to receive a payment of the * carried interest of a * general partner in a * VCLP, an * ESVCLP or an * AFOF or a * limited partner in a * VCMP. (2) These provisions do not apply to the CGT event: (a) sections 6 ‑ 5 (about * ordinary income), 8 ‑ 1 (about amounts you can deduct), 15 ‑ 15 and 25 ‑ 40 (about profit ‑ making undertakings or plans) and 118 ‑ 20 (reducing capital gains if amount otherwise assessable); (b) sections 25A and 52 of the Income Tax Assessment Act 1936 (about profit ‑ making undertakings or schemes). (3) Section 6 ‑ 10 (about * statutory income) does not apply to the * CGT event except so far as that section applies in relation to section 102 ‑ 5 (about net capital gains).

Amendment history: Inserted 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 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

s 118-22 — Superannuation lump sums and employment termination payments

In applying section 118 ‑ 20, treat a * superannuation lump sum or an * employment termination payment that you receive as being included in your assessable income.

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 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)

s 118-24 — Depreciating assets

(1) A * capital gain or * capital loss you make from a * CGT event (that is also a * balancing adjustment event) that happens to a * depreciating asset is disregarded if the asset was: (a) an asset you * held; or (b) if you are a partner, an asset of the partnership; or (c) if you are absolutely entitled to the asset as against the trustee of a trust (disregarding any legal disability), an asset of the trustee; where the decline in value of the asset was worked out under Division 40 (including that Division as it applies under Division 355), or the deduction for the asset was calculated under Division 328, or would have been if the asset had been used. (2) However, subsection (1) does not apply to: (a) a * capital gain or * capital loss you make from * CGT event J2 or * CGT event K7 happening; or (b) a * depreciating asset for which you or another entity has deducted or can deduct amounts under Subdivision 40 ‑ F or 40 ‑ G.

Amendment history: Inserted 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)) | Repealed and substituted by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 170 of 2001, effective Sch 2 (items 28–44, 51): 12 pm (A.C.T.) 29 Jan 2001 (s 2(2)) Sch 2 (items 69–84, 92): 30 June 2001 (s 2(3)) Sch 3 (items 11–13, 19(1)): 1 Oct 2001 (s 2(1)) | Repealed and substituted 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 93 of 2011, effective Schedule 1, Schedule 3 (items 1–4, 15–42, 54–107) and Schedule 4 (items 1–9): Royal Assent

s 118-25 — Trading stock

(1) A * capital gain or * capital loss you make from a * CGT asset is disregarded if, at the time of the * CGT event, the asset is: (a) your * trading stock; or (b) if you are a partner, trading stock of the partnership; or (c) if you are absolutely entitled to the asset as against the trustee of a trust (disregarding any legal disability), trading stock of the trustee. (2) A * capital gain or * capital loss you make in these circumstances is disregarded: (a) you start holding as * trading stock a * CGT asset you already own but do not hold as trading stock; and (b) you elect under paragraph 70 ‑ 30(1)(a) to be treated as having sold the asset for its cost (worked out under that section). Note 1: Paragraph 70 ‑ 30(1)(a) allows you to elect the cost of the asset, or its market value, just before it became trading stock. Note 2: You may make a capital gain or loss if you elect its market value: see CGT event K4.

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 118-27 — Division 230 financial arrangements and financial arrangements to which Subdivision 250 ‑ E applies

(1) A * capital gain or * capital loss you make: (a) from a * CGT asset; or (b) in creating a CGT asset; or (c) from the discharge of a liability; is disregarded if, at the time of the * CGT event, the asset or liability is, or is part of, a * Division 230 financial arrangement. Note 1: Paragraph (b) is relevant for CGT event D1. Note 2: Paragraph (c) is relevant for CGT event L7. (2) Subsection (1) does not apply to the following: (a) a gain or loss that subsection 230 ‑ 310(4) (which deals with hedging financial arrangements) provides is to be treated as a * capital gain or * capital loss; (b) a loss that is reduced under subsection 230 ‑ 465(2), to the extent of that reduction (this is the extent to which the loss is of a capital nature). (3) Subsection (1) does not apply if the situation that gives rise to the * CGT event does not result in a gain from the arrangement being included in your assessable income under Division 230, or in a loss from the arrangement entitling you to a deduction under Division 230. (4) A * capital gain or * capital loss you make from a * CGT asset is disregarded if, at the time of the * CGT event, the asset is, or is part of, a * financial arrangement to which Subdivision 250 ‑ E applies.

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) | Repealed and substituted 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 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 118-30 — Film copyright

(1) A * capital gain or * capital loss you make from a * CGT event relating to your interest in the copyright in a film is disregarded if an amount is included in your assessable income under section 26AG (about film proceeds) of the Income Tax Assessment Act 1936 because of the event. (2) If you are a partner in a partnership, a * capital gain or * capital loss you make from a * CGT event relating to the partnership’s interest in the copyright in a film is disregarded if an amount is included in the assessable income of a partner (including you) under section 26AG of that Act because of the event. (3) If you are absolutely entitled to an interest in the copyright in a film as against the trustee of a trust (disregarding any legal disability), a * capital gain or * capital loss you make from a * CGT event relating to the interest is disregarded if an amount is included in your assessable income or the net income of the trust under section 26AG of that Act because of the event.

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 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) | Repealed and substituted by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent

s 118-35 — R&D

Disregard a * capital gain or * capital loss from a * CGT event if an amount is included in your assessable income in any income year under section 355 ‑ 410 (about disposal of R&D results) because of that CGT event.

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 170 of 2001, effective Sch 2 (items 28–44, 51): 12 pm (A.C.T.) 29 Jan 2001 (s 2(2)) Sch 2 (items 69–84, 92): 30 June 2001 (s 2(3)) Sch 3 (items 11–13, 19(1)): 1 Oct 2001 (s 2(1)) | Repealed and substituted 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 118-37 — Compensation, damages etc.

(1) A * capital gain or * capital loss you make from a * CGT event relating directly to any of these is disregarded: (a) compensation or damages you receive for: (i) any wrong or injury you suffer in your occupation; or (ii) any wrong, injury or illness you or your * relative suffers personally; (b) compensation or damages you receive as the trustee of a trust (other than a trust that is a * complying superannuation entity) for: (i) any wrong or injury a beneficiary of the trust suffers in his or her occupation; or (ii) any wrong, injury or illness a beneficiary of the trust, or the beneficiary’s relative, suffers personally; (ba) a * CGT asset you receive, as a beneficiary of a trust, from the trustee of the trust to the extent that the CGT asset is attributable to compensation or damages that the trustee receives as described in paragraph (b) for: (i) any wrong or injury you suffer in your occupation; or (ii) any wrong, injury or illness you or your relative suffers personally; (c) gambling, a game or a competition with prizes; (g) a tobacco industry exit grant that you receive under the program known as the Tobacco Growers Adjustment Assistance Programme 2006 if, as a condition of receiving the grant, you entered into an undertaking not to become the owner or operator of any agricultural * enterprise within 5 years after receiving the grant; (ga) a * water entitlement, to the extent that the CGT event happens because an entity * derives a * SRWUIP payment that is * non ‑ assessable non ‑ exempt income under section 59 ‑ 65; (gb) a * SRWUIP payment you derive that is non ‑ assessable non ‑ exempt income under section 59 ‑ 65; (h) a right or entitlement to a * tax offset, a * deduction, or a similar benefit under an * Australian law, a * foreign law or a law of part of a foreign country; (i) a variation, transfer or revocation of an allocation (within the meaning of the National Rental Affordability Scheme Act 2008 ); (j) anything of economic value provided to you (whether directly or indirectly, such as through an * NRAS consortium of which you are a * member) by: (i) a Department of a State or Territory; or (ii) a body (whether incorporated or not) established for a public purpose by or under a law of a State or Territory; in relation to your participation in the * National Rental Affordability Scheme. (2) A * capital gain or * capital loss is disregarded if you make it as a result of receiving a payment or property as reimbursement or payment of your expenses, or receiving or using a voucher or certificate, under: (a) a scheme established by an * Australian government agency, a * local governing body or a * foreign government agency under an enactment or an instrument of a legislative character; or (b) the General Practice Rural Incentives Program or the Rural and Remote General Practice Program; or (c) the Sydney Aircraft Noise Insulation Project; or (d) the M4/M5 Cashback Scheme; or (e) the Unlawful Termination Assistance Scheme or the Alternative Dispute Resolution Assistance Scheme. (3) A * capital gain you make from compensation you receive under the * firearms surrender arrangements is disregarded. (4) A * capital gain or * capital loss you make from a payment you receive is disregarded if: (a) you are an Australian resident; and (b) you receive the payment: (i) under the program known as the “German Forced Labour Compensation Programme”; and (ii) from the Foundation known as “Remembrance, Responsibility and Future” or any of the Foundation’s partner organisations; and (c) the payment is in the nature of compensation for: (i) any wrong or injury; or (ii) any loss of, or damage to, property; that you, or another person, suffered as a result of injustices committed during the National Socialist period. (5) A * capital gain or * capital loss you make as a result of receiving a payment or property is disregarded if: (a) you are an individual who is an Australian resident; and (b) you receive the payment or property from a source in a foreign country; and (c) you do not receive the payment or property directly or indirectly from an * associate of yours; and (d) the payment or property you receive is in connection with: (i) any wrong or injury; or (ii) any loss of, or damage to, property; or (iii) any other detriment; that you, or another individual, suffered as a result of: (iv) persecution by the National Socialist regime of Germany during the National Socialist period; or (v) persecution by any other enemy of the Commonwealth during the Second World War; or (vi) persecution by an enemy ‑ associated regime during the Second World War; or (vii) flight from persecution mentioned in subparagraph (iv), (v) or (vi); or (viii) participation in a resistance movement during the Second World War against forces of the National Socialist regime of Germany; or (ix) participation in a resistance movement during the Second World War against forces of any other enemy of the Commonwealth. (6) For the purposes of subsection (5), the duration of the Second World War includes: (a) the period immediately before the Second World War; and (b) the period immediately after the Second World War. (7) For the purposes of subsection (5), a regime is an enemy ‑ associated regime if, and only if, it was: (a) in alliance with; or (b) occupied by; or (c) effectively controlled by; or (d) under duress from; or (e) surrounded by; either or both of the following: (f) the National Socialist regime of Germany; (g) any other enemy of the Commonwealth. (8) Subsection (5) applies to a payment or property received by the * legal personal representative of an individual in a corresponding way to the way in which that subsection would have applied if the payment or property had been received by the individual. (9) Subsection (5) applies to a payment or property received by: (a) the * legal personal representative of a deceased individual; or (b) the trustee of a trust established by the will of a deceased individual; in a corresponding way to the way in which that subsection would have applied if: (c) the individual had not died; and (d) the payment or property had been received by the individual.

Amendment history: Inserted by No 94 of 1999, effective 16 July 1999 (s 2(1)–(3)) | Amended by No 22 of 2000, effective 3 Apr 2000 | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 12 of 2003, effective Schedule 1: 29 Aug 2001 Remainder: Royal Assent | Amended by No 20 of 2004, effective Schedule 6: 1 July 2000 Remainder: Royal Assent | 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 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3) | Amended by No 38 of 2008, effective Schedule 1, Schedules 3–6, Schedule 7 (items 1–3, 5), Schedule 8 (items 1–11), Schedule 9 (items 2–4), Schedule 10, Schedule 12 and Schedule 13: 24 June 2008 Schedule 8 (items 12–21): 1 July 2012 | Amended by No 123 of 2008, effective Schedule 3 (items 1, 2): 26 Nov 2008 | Amended by No 130 of 2008, effective 1 July 2008 | 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 62 of 2011, effective Sch 1 (items 1–3, 6–12, 14), Sch 2 (items 8–27, 45–51), Sch 3 (items 1–3, 9–19) and Sch 4 (items 33, 34): 29 June 2011 (s 2(1) items 2, 3, 5, 6) Sch 3 (items 4–8): 30 June 2011 (s 2(1) item 4) | 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 13 of 2014, effective Sch 2 (items 33–56): 1 July 2014 (s 2(1) item 3) Sch 2 (items 143, 144): 26 Feb 2014 (s 2(1) item 8) Sch 2 (items 147–149): 1 Oct 2014 (s 2(1) item 9) | 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 21 of 2015, effective s 4 and Sch 6 (items 1, 2, 16–25, 73): 19 Mar 2015 (s 2(1) items 1, 7–11, 13) Sch 1 (items 1–17, 49), Sch 3 and Sch 7 (items 13–21): 20 Mar 2015 (s 2(1) items 2, 4, 15) Sch 4 (items 1–5, 9–17): 1 July 2015 (s 2(1) item 5) Sch 6 (items 51–59, 74–79): never commences (s 2(1) items 12, 14)

s 118-40 — Expiry of a lease

A * capital loss a lessee makes from the expiry, surrender, forfeiture or assignment of a lease (except one granted for 99 years or more) is disregarded if the lessee did not use the lease solely or mainly for the * purpose of producing assessable income.

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 118-42 — Transfer of stratum units

If: (a) you own land on which there is a building; and (b) you subdivide the building into * stratum units; and (c) you transfer each unit to the entity who had the right to occupy it just before the subdivision; a * capital gain or * capital loss you make from transferring the unit is disregarded.

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

s 118-45 — Sale of rights to mine

A * capital gain or * capital loss you make from the sale, transfer or assignment of your rights to mine in a particular area in Australia is disregarded if you have * exempt income for the income year (because of the former section 330 ‑ 60) from the sale, transfer or assignment.

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))

s 118-55 — Foreign currency hedging gains and losses

A * capital gain or * capital loss you make from a contract you entered into solely to reduce the risk of financial loss you may suffer from currency exchange rate fluctuations is disregarded if the contract relates to: (a) a liability you have to make a payment under another contract; or (b) a * CGT asset that is a right you * acquired before 20 September 1985 to receive money under another contract.

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 118-60 — Certain gifts

(1) A * capital gain or * capital loss made from a testamentary gift of property that would have been deductible under section 30 ‑ 15 if it had not been a testamentary gift is disregarded. (1A) If the only reason the gain or loss is not disregarded under subsection (1) is because the property has not been valued by the Commissioner at more than $5,000, then, for the purposes of that subsection, it is taken to have been so valued. (2) A * capital gain or * capital loss made from a gift of property that is deductible under section 30 ‑ 15 because of item 4 or 5 in the table in that section is disregarded. (3) However, subsection (2) does not apply if the gift was not a testamentary gift and the property is later * acquired for less than * market value by the person who made the gift or an * associate of that person. (4) If the gift was a testamentary gift and the property is later * acquired for less than * market value by the deceased person’s estate or a person (the deceased’s associate ) who: (a) is an * associate of the deceased person’s estate; or (b) was an associate of the deceased person immediately before the deceased person’s death; the * cost base and the * reduced cost base of the property in the hands of the estate or the deceased’s associate is worked out under section 128 ‑ 15 as if the property had passed in the estate to the estate or the deceased’s associate.

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 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 63 of 2005, effective Schedule 1 (items 5–23): 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 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 118-65 — Later distributions of personal services income

A * capital loss you make from a payment is disregarded if it is a payment to any entity of: (a) * personal services income included in an individual’s assessable income under section 86 ‑ 15; or (b) any other amount that is attributable to that income.

Amendment history: Inserted by No 86 of 2000, effective Sch 1 (items 1–26): 30 June 2000 (s 2(1))

s 118-70 — Transactions by exempt entities

A * capital loss made by an entity is disregarded if it was an * exempt entity at the time it made the loss.

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)) | Inserted 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)

s 118-75 — Marriage or relationship breakdown settlements

(1) A * capital gain or * capital loss you make as a result of * CGT event C2 happening is disregarded if: (a) you make the gain or loss in relation to a right that directly relates to the breakdown of a relationship between * spouses; and (b) at the time of the CGT event: (i) you and your spouse or former spouse are separated; and (ii) there is no reasonable likelihood of cohabitation being resumed. Example: Maude receives an amount from Claude by way of a settlement directly related to the breakdown of their marriage. CGT event C2 would happen to Maude on satisfaction of her legally enforceable right to the amount. Any capital gain or loss that Maude makes in these circumstances is disregarded. (2) For the purposes of this section, the question whether * spouses or former spouses have separated is to be determined in the same way as it is for the purposes of section 48 of the Family Law Act 1975 (as affected by sections 49 and 50 of that Act).

Amendment history: Inserted by No 168 of 2006, effective Schedule 3 (items 3–5): 13 Dec 2005 Remainder: Royal Assent | Amended by No 144 of 2008, effective Schedule 14 (items 59–96): 10 Dec 2008

s 118-77 — Native title and rights to native title benefits

(1) A * capital gain or * capital loss you make is disregarded if: (a) you are an * Indigenous person or an * Indigenous holding entity; and (b) you make the gain or loss because one of the following things happens in relation to a * CGT asset mentioned in subsection (2): (i) you transfer the CGT asset to one or more entities that are either Indigenous persons or Indigenous holding entities; (ii) you create a trust, that is an Indigenous holding entity, over the CGT asset; (iii) your ownership of the CGT asset ends, resulting in * CGT event C2 happening in relation to the CGT asset. (2) The * CGT assets are as follows: (a) * native title; (b) the right to be provided with a * native title benefit. Note: Paragraph (a) does not require a determination of native title under the Native Title Act 1993 .

Amendment history: Inserted by No 84 of 2013, effective s 4, Sch 1 (items 2–9, 19–23), Sch 2, Sch 3, Sch 6 and Sch 8 (items 27–32): 28 June 2013 (s 2(1) items 1, 2, 4)

s 118-80 — Reduction of boat capital gain

A * capital gain you make from a * CGT event happening in relation to a boat for an income year is reduced by an amount that is a quarantined amount for you for the income year under subsection 26 ‑ 47(2). Note: Section 26 ‑ 47 denies deductions for the excess of boat expenditure over boat income.

Amendment history: Inserted 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

s 118-85 — Special disability trusts

(1) A * capital gain or * capital loss you make is disregarded if you make it from transferring a * CGT asset for no consideration to: (a) a * special disability trust; or (b) a trust that becomes a special disability trust as soon as practicable after the transfer. (2) In working out whether the transfer was for consideration, disregard any interest in the trust.

Amendment history: Inserted by No 147 of 2011, effective s. 4, Schedule 1, Schedule 5 (items 1–9, 16–20), Schedule 6 (items 1, 6) and Schedule 9: Royal Assent Schedule 8 (items 2–9, 37, 38, 41): 1 Jan 2012

s 118-100 — What this Subdivision is about

You can ignore a capital gain or capital loss you make from a CGT event that happens to a dwelling that is your main residence. However, this exemption may not apply if you are a foreign resident, and may not apply in full if: • it was your main residence during part only of your ownership period; or • it was used for the purpose of producing assessable income. There are special rules for dwellings passed from, or owned by a trustee of, a deceased estate. There is a similar exemption for a CGT event that is a compulsory acquisition (or similar arrangement) happening to adjacent land but not also to the dwelling itself. Table of sections 118 ‑ 105 Map of this Subdivision Basic case and concepts 118 ‑ 110 Basic case 118 ‑ 115 Meaning of dwelling 118 ‑ 120 Extension to adjacent land etc. 118 ‑ 125 Meaning of ownership period 118 ‑ 130 Meaning of ownership interest in land or a dwelling Rules that may extend the exemption 118 ‑ 135 Moving into a dwelling 118 ‑ 140 Changing main residences 118 ‑ 145 Absences 118 ‑ 147 Absence from dwelling replacing main residence that was compulsorily acquired, destroyed etc. 118 ‑ 150 If you build, repair or renovate a dwelling 118 ‑ 155 Where individual referred to in section 118 ‑ 150 dies 118 ‑ 160 Destruction of dwelling and sale of land Rules that may limit the exemption 118 ‑ 165 Separate CGT event for adjacent land or other structures 118 ‑ 170 Spouse having different main residence 118 ‑ 175 Dependent child having different main residence Roll ‑ overs under Subdivision 126 ‑ A 118 ‑ 178 Previous roll ‑ over under Subdivision 126 ‑ A 118 ‑ 180 Acquisition of dwelling from company or trust on marriage or relationship breakdown—roll ‑ over provision applying Partial exemption rules 118 ‑ 185 Partial exemption where dwelling was your main residence during part only of ownership period 118 ‑ 190 Use of dwelling for producing assessable income 118 ‑ 192 Special rule for first use to produce income Dwellings acquired from deceased estates 118 ‑ 195 Dwelling acquired from a deceased estate 118 ‑ 197 Special rule for surviving joint tenant 118 ‑ 200 Partial exemption for deceased estate dwellings 118 ‑ 205 Adjustment if dwelling inherited from deceased individual 118 ‑ 210 Trustee acquiring dwelling under will Special disability trusts 118 ‑ 215 What the following provisions are about 118 ‑ 218 Exemption available to trustee—main case 118 ‑ 220 Exemption available to trustee—after the principal beneficiary’s death 118 ‑ 222 Exemption available to other beneficiary who acquires the CGT asset after the principal beneficiary’s death 118 ‑ 225 Amount of exemption available after the principal beneficiary’s death—general 118 ‑ 227 Amount of exemption available after the principal beneficiary’s death—cost base and reduced cost base 118 ‑ 230 Application of CGT events E5 and E7 in relation to main residence exemption and special disability trusts Compulsory acquisitions of adjacent land only 118 ‑ 240 What the following provisions are about 118 ‑ 245 CGT events happening only to adjacent land 118 ‑ 250 Compulsory acquisitions of adjacent land 118 ‑ 255 Maximum exempt area 118 ‑ 260 Partial exemption rules 118 ‑ 265 Extension to adjacent structures

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 61 of 2011, effective s. 4, Schedule 1, Schedule 2 (items 1–8), Schedule 3, Schedule 4 and Schedule 7: Royal Assent | Amended by No 129 of 2019, effective Sch 1 (items 1–31, 33–36) and Sch 2: 1 Jan 2020 (s 2(1) item 2)

s 118-105 — Map of this Subdivision

Note: The exemption may not be available for the main residence of a foreign resident.

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 61 of 2011, effective s. 4, Schedule 1, Schedule 2 (items 1–8), Schedule 3, Schedule 4 and Schedule 7: Royal Assent | Repealed and substituted by No 147 of 2011, effective s. 4, Schedule 1, Schedule 5 (items 1–9, 16–20), Schedule 6 (items 1, 6) and Schedule 9: Royal Assent Schedule 8 (items 2–9, 37, 38, 41): 1 Jan 2012 | Amended by No 129 of 2019, effective Sch 1 (items 1–31, 33–36) and Sch 2: 1 Jan 2020 (s 2(1) item 2)

s 118-110 — Basic case

(1) A * capital gain or * capital loss you make from a * CGT event that happens in relation to a * CGT asset that is a * dwelling or your * ownership interest in it is disregarded if: (a) you are an individual; and (b) the dwelling was your main residence throughout your * ownership period; and (c) the interest did not * pass to you as a beneficiary in, and you did not * acquire it as a trustee of, the estate of a deceased person. Note 1: You may make a capital gain or capital loss even though you comply with this section if the dwelling was used for the purpose of producing assessable income: see section 118 ‑ 190. Note 2: There is a separate rule for beneficiaries and trustees of deceased estates: see section 118 ‑ 195. Note 3: There is a separate rule for a CGT event that is a compulsory acquisition (or similar arrangement) happening to adjacent land but not also to the dwelling itself: see section 118 ‑ 245. (2) Only these * CGT events are relevant: (a) CGT events A1, B1, C1, C2, E1, E2, F2, K3, K4 and K6 (except one involving the forfeiting of a deposit); and (b) a CGT event that involves the forfeiting of a deposit as part of an uninterrupted sequence of transactions ending in one of the events specified in paragraph (a) subsequently happening. Note: The full list of CGT events is in section 104 ‑ 5. (3) However, this section does not apply if, at the time the * CGT event happens, you: (a) are an * excluded foreign resident; or (b) are a foreign resident who does not satisfy the * life events test. (4) You are an excluded foreign resident , at a particular time, if: (a) you are a foreign resident at that time; and (b) the continuous period ending at that time for which you have been a foreign resident is more than 6 years. (5) You satisfy the life events test , at the time a * CGT event happens, if: (a) the continuous period ending at that time for which you have been a foreign resident is 6 years or less; and (b) you are covered by any of the following subparagraphs: (i) you or your * spouse has had a * terminal medical condition that existed at any time during that period of foreign residency; (ii) your * child has had a terminal medical condition that existed at any time during that period of foreign residency, and that child was under 18 years of age at at least one such time; (iii) your spouse, or your child who was under 18 years of age at death, has died during that period of foreign residency; (iv) the CGT event happens because of a matter referred to in a paragraph of subsection 126 ‑ 5(1) involving you and your spouse (or former spouse).

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 61 of 2011, effective s. 4, Schedule 1, Schedule 2 (items 1–8), Schedule 3, Schedule 4 and Schedule 7: Royal Assent | Amended by No 129 of 2019, effective Sch 1 (items 1–31, 33–36) and Sch 2: 1 Jan 2020 (s 2(1) item 2)

s 118-115 — Meaning of dwelling

(1) A dwelling includes: (a) a unit of accommodation that: (i) is a building or is contained in a building; and (ii) consists wholly or mainly of residential accommodation; and (b) a unit of accommodation that is a caravan, houseboat or other mobile home; and (c) any land immediately under the unit of accommodation. (2) However, except as provided in section 118 ‑ 120, a dwelling does not include any land adjacent to a building.

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 118-120 — Extension to adjacent land etc.

Adjacent land (1) This Subdivision applies to a * dwelling’s * adjacent land (if the same * CGT event happens to that land or your * ownership interest in it) as if it were a dwelling. (2) Land adjacent to a * dwelling is its adjacent land to the extent that the land was used primarily for private or domestic purposes in association with the dwelling. (3) The maximum area of * adjacent land covered by the exemption for the * CGT event (the current event ) is 2 hectares, less the area of the land immediately under the * dwelling. (4) However, if subsection 118 ‑ 245(2) applied to you for an earlier * CGT event that happened in relation to: (a) other land that was part of the * dwelling’s * adjacent land at the time of the earlier CGT event; or (b) your * ownership interest in that other land at that time; the maximum area of land covered by the exemption for the current event is the * maximum exempt area for the current event and the dwelling. Adjacent structures (5) This Subdivision applies to an * adjacent structure of a flat or home unit (if the same * CGT event happens to that structure or your * ownership interest in it) as if it were a * dwelling. (6) A garage, storeroom or other structure associated with a flat or home unit is an adjacent structure of the flat or home unit to the extent that the structure was used primarily for private or domestic purposes in association with the flat or home unit.

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 61 of 2011, effective s. 4, Schedule 1, Schedule 2 (items 1–8), Schedule 3, Schedule 4 and Schedule 7: Royal Assent

s 118-125 — Meaning of ownership period

Your ownership period of a * dwelling is the period on or after 20 September 1985 when you had an * ownership interest in: (a) the dwelling; or (b) land ( * acquired on or after 20 September 1985) on which the dwelling is later built.

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 118-130 — Meaning of ownership interest in land or a dwelling

(1) You have an ownership interest in land or a * dwelling if: (a) for land—you have a legal or equitable interest in it or a right to occupy it; or (b) for a dwelling that is not a flat or home unit—you have a legal or equitable interest in the land on which it is erected, or a licence or right to occupy it; or (c) for a flat or home unit—you have: (i) a legal or equitable interest in a * stratum unit in it; or (ii) a licence or right to occupy it; or (iii) a * share in a company that owns a legal or equitable interest in the land on which the flat or home unit is erected and that gives you to a right to occupy it. (2) For land or a * dwelling that you * acquire under a contract, you have an ownership interest in it from: (a) the time when you obtain legal ownership of it; or (b) if the contract or a related contract gives you a right to occupy it at an earlier time—the earlier time. (3) For land or a * dwelling where you have a contract for the happening of the * CGT event, you have an ownership interest in it until your legal ownership of it ends.

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 118-135 — Moving into a dwelling

If a * dwelling becomes your main residence by the time it was first practicable for you to move into it after you * acquired your * ownership interest in it, the dwelling is treated as your main residence from when you acquired the interest until it actually became your main residence.

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 118-140 — Changing main residences

(1) If you * acquire an * ownership interest in a * dwelling that is to become your main residence and you still have your ownership interest in your existing main residence, both dwellings are treated as your main residence for the shorter of: (a) 6 months ending when your ownership interest in your existing main residence ends; or (b) the period between the acquisition of the new ownership interest and the time when the ownership interest referred to in paragraph (a) ends. (2) Subsection (1) only applies if: (a) your existing main residence was your main residence for a continuous period of at least 3 months in the 12 months ending when your ownership interest in it ends; and (b) your existing main residence was not used for the * purpose of producing assessable income in any part of that 12 month period when it was not your main residence.

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 118-145 — Absences

(1) If a * dwelling that was your main residence ceases to be your main residence, you may choose to continue to treat it as your main residence. (2) If you use the part of the * dwelling that was your main residence for the * purpose of producing assessable income, the maximum period that you can treat it as your main residence under this section while you use it for that purpose is 6 years. You are entitled to another maximum period of 6 years each time the dwelling again becomes and ceases to be your main residence. (3) If you do not use the * dwelling for that purpose, you can treat it as your main residence under this section indefinitely. (3A) This section does not apply if the * dwelling was your main residence because of section 118 ‑ 147 and ceases to be your main residence because of subsections 118 ‑ 147(3) and (4). (4) If you make the choice, you cannot treat any other * dwelling as your main residence while you apply this section, except if section 118 ‑ 140 (about changing main residences) applies. Example: You live in a house for 3 years. You are posted overseas for 5 years and you rent it out during your absence. On your return you move back into it for 2 years. You are then posted overseas again for 4 years (again renting it out). You then move back into it for 3 years, after which you sell the house. You have not treated any other dwelling as your main residence during your absences. You may choose to continue to treat the house as your main residence during both absences because each absence is less than 6 years. You can make this choice when preparing your income tax return for the income year in which you sold the house.

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 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 129 of 2019, effective Sch 1 (items 1–31, 33–36) and Sch 2: 1 Jan 2020 (s 2(1) item 2)