Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 1/4)
Character Range: 2005291–2007911

4                     A listed investment company                                       The company

Note 1: Section 103‑25 specifies when you must make the choice and provides that the way you prepare your income tax return is evidence of your choice.
Note 2: For each CGT asset whose cost base you need to work out, you may either choose to index the expenditure included in the asset's cost base or not make that choice. If you do not choose to index the expenditure, your net capital gain includes only part of your capital gain on the CGT asset as worked out on the basis of the cost base not including indexation and reduced by your capital losses.
 (3) Also, for the purpose of working out the *capital gain of a *life insurance company from a *CGT event happening after 30 June 2000 in respect of a *CGT asset that is a *complying superannuation asset, the cost base includes indexation only if the life insurance company chooses that the cost base includes indexation.
Note: Section 110‑25 of the Income Tax (Transitional Provisions) Act 1997 provides that, in working out the capital gain from a CGT event after 11.45 am on 21 September 1999 and before 1 July 2000 in respect of an asset of a life insurance company or registered organisation, the cost base includes indexation only if the company or organisation chooses it.

What does not form part of the cost base

110‑37  Expenditure forming part of cost base or element
 (1) If a later provision of this Subdivision says that:
 (a) certain expenditure does not form part of the *cost base of a *CGT asset; or
 (b) the cost base is reduced by certain expenditure;
the expenditure is initially included in the cost base, which is then reduced by the amount of the expenditure just before a *CGT event happens in relation to the asset.
Note: This has the effect of recognising in the cost base any indexed component relating to the expenditure.
 (2) On the other hand, if such a provision says that:
 (a) certain expenditure does not form part of one or more elements of the *cost base of a *CGT asset; or
 (b) one or more elements of the cost base are reduced by certain expenditure;
the expenditure is never included in the relevant elements of the cost base.
Note: This has the effect of not recognising to any extent this expenditure in the cost base.

110‑38  Exclusions
 (1) Expenditure does not form part of any element of the cost base to the extent that section 26‑54 prevents it being deducted (even if some other provision also prevents it being deducted).
Note: Section 26‑54 prevents deductions for expenditure related to certain offences.
 (2)