Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p13
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 13/22)
Character Range: 2175831–2178496

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

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.

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.

General rules

116‑20  General rules about capital proceeds
 (1) The capital proceeds from a *CGT event are the total