Document ID: chunk:federal_register_of_legislation:C2025C00029:section:14:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 14 (pt 8/20)
Character Range: 1796758–1799194

A1 happens if you *dispose of a *CGT asset.
 (2) You dispose of a *CGT asset if a change of ownership occurs from you to another entity, whether because of some act or event or by operation of law. However, a change of ownership does not occur if you stop being the legal owner of the asset but continue to be its beneficial owner.
Note: A change in the trustee of a trust does not constitute a change in the entity that is the trustee of the trust (see subsection 960‑100(2)). This means that CGT event A1 will not happen merely because of a change in the trustee.
 (3) The time of the event is:
 (a) when you enter into the contract for the *disposal; or
 (b) if there is no contract—when the change of ownership occurs.
Example: In June 1999 you enter into a contract to sell land. The contract is settled in October 1999. You make a capital gain of $50,000.
 The gain is made in the 1998‑99 income year (the year you entered into the contract) and not the 1999‑2000 income year (the year that settlement takes place).
Note 1: If the contract falls through before completion, this event does not happen because no change in ownership occurs.
Note 2: If the asset was compulsorily acquired from you: see subsection (6).
 (4) You make a capital gain if the *capital proceeds from the disposal are more than the asset's *cost base. You make a capital loss if those capital proceeds are less than the asset's *reduced cost base.

Exceptions
 (5) A *capital gain or *capital loss you make is disregarded if:
 (a) you *acquired the asset before 20 September 1985; or
 (b) for a lease that you granted:
 (i) it was granted before that day; or
 (ii) if it has been renewed or extended—the start of the last renewal or extension occurred before that day.
Note 1: You can make a gain if you dispose of shares in a company, or an interest in a trust, that you acquired before that day: see CGT event K6.
Note 2: A capital gain or loss you make because you assign a right under or in relation to a general insurance policy you held with an HIH company to the Commonwealth, the trustee of the HIH Trust or a prescribed entity is also disregarded: see section 322‑15.
Note 3: A capital gain or loss made by a demerging entity from CGT event A1 happening as a result of a demerger is also disregarded: see section 125‑155.
Note 4: A capital gain or loss you make because of section 16AI of the Banking Act 1959 is disregarded: see section 253‑10 of