Document ID: chunk:federal_register_of_legislation:C2025C00029:section:115:p26
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 115 (pt 26/40)
Character Range: 6570263–6572887

and
 (ii) at a time when the right is owned by an entity that is your *associate immediately before the realisation time for the underlying asset; and
 (b) is not disregarded;
the amount worked out under subsection (2) is taken to have been reduced by the amount of that gain.
Note 1: To work out a gain realised for income tax purposes by a realisation event that happens to the right, see sections 977‑15, 977‑35, 977‑40 and 977‑55. If more than one of those sections applies to the right, see section 723‑50.
Note 2: This subsection may require amendment of an assessment for the income year in which the realisation time happens.

723‑20  Exceptions

Conservation covenant over land
 (1) Section 723‑10 or 723‑15 does not reduce a loss if:
 (a) the underlying asset is land; and
 (b) the right referred to in paragraph 723‑10(1)(b) or 723‑15(1)(b) is a *conservation covenant over the land.

Right created on death of owner
 (2) Section 723‑10 or 723‑15 does not reduce a loss if the right referred to in paragraph 723‑10(1)(b) or 723‑15(1)(b) is created by:
 (a) a will or codicil; or
 (b) an order of a court varying or modifying a will or codicil; or
 (c) a total or partial intestacy; or
 (d) an order of a court varying or modifying the application of the law about distributing the estate of someone who dies intestate.

723‑25  Realisation event that is only a partial realisation
 (1) Section 723‑10 or 723‑15 applies differently if:
 (a) a *realisation event happens to some part of a *CGT asset (the underlying asset) you own that, at the time of the event:
 (i) is not a *depreciating asset; or
 (ii) is an item of your *trading stock; or
 (iii) is a *revenue asset of yours;
  but not to the remainder of the underlying asset; or
 (b) a realisation event consists of creating an interest in a CGT asset (also the underlying asset) you own that, at the time of the event, is covered by subparagraph (a)(i), (ii) or (iii).
 (2) The section applies on the basis that:
 (a) the *realisation event happens to the underlying asset; and
 (b) the shortfall on creating the right referred to in paragraph 723‑10(1)(e) or 723‑15(1)(c); and
 (c) the deficit on realisation referred to in paragraph 723‑10(1)(g) or 723‑15(1)(e);
are each reduced by multiplying its amount by this fraction:
 (3) For the purposes of the formula in subsection (2):
market value of part means the *market value, at the time of the *realisation event, of the part referred to in paragraph (1)(a) or the interest referred to in paragraph (1)(b), as appropriate.
market value of underlying asset means the *market value, immediately before the