Document ID: chunk:federal_register_of_legislation:C2007A00055:clause:1_35
Version: federal_register_of_legislation:C2007A00055
Segment Type: clause
Provision Reference: sch 1 cl 35
Character Range: 23178–24085

35  After subsection 152‑40(3)
Insert:

 (3A) A *share in a company, or an interest in a trust, mentioned in paragraph (3)(a) is an active asset at a time (the later time) if:
 (a) the share or interest was an active asset at an earlier time; and
 (b) it is reasonable to conclude that the share or interest is still an active asset at the later time.

Note: This ensures that the 80% test does not need to be applied on a day to day basis.

 (3B) A *share in a company, or an interest in a trust, mentioned in paragraph (3)(a) is an active asset at a time if:
 (a) the share or interest fails to meet the requirements under subsection (3) at that time; and
 (b) the failure is of a temporary nature only.

Note: If a share in a company or an interest in a trust is chosen as a replacement asset, this ensures that a temporary failure of the 80% test does not automatically lead to CGT event J2 happening.