Document ID: chunk:federal_register_of_legislation:C2017A00055:clause:1_19:p2
Version: federal_register_of_legislation:C2017A00055
Segment Type: clause
Provision Reference: sch 1 cl 19 (pt 2/2)
Character Range: 15169–17001

for the 2016‑17 income year; and
 (c) cannot be revoked.

Disregard initial capital gain
 (3) Disregard the capital gain mentioned in paragraph (1)(b).

Recognition of deferred notional gain
 (4) The deferred notional gain is the 2016‑17 non‑exempt proportion of the amount of the trust's net capital gain for the 2016‑17 income year determined on the assumptions that:
 (a) subsection (3) of this section does not apply; and
 (b) the trust made no capital gains in that income year other than the gain mentioned in paragraph (1)(b); and
 (c) the trust made no capital losses in that income year; and
 (d) the trust had no previously unapplied net capital losses from earlier income years.
 (5) For the purposes of Division 102 of the Income Tax Assessment Act 1997, if a realisation event happens to the asset in an income year that starts on or after 1 July 2017:
 (a) treat the trust as having made a capital gain in that income year equal to the deferred notional gain; and
 (b) disregard section 102‑20 of that Act in respect of that capital gain; and
 (c) treat that capital gain as not being a discount capital gain.
 (6) Section 295‑400 of the Income Tax Assessment Act 1997 does not apply to the amount by which a net capital gain is increased (or comes into existence) as a result of subsection (5).
 (7) In this section:
2016‑17 non‑exempt proportion means:
 (a) unless paragraph (b) applies—1 minus the proportion mentioned in subsection 295‑400(1) of the Income Tax Assessment Act 1997; or
 (b) if the trustee has made a choice under subsection 295‑400(3) of that Act—the percentage worked out by subtracting the percentage mentioned in subsection 295‑400(4) of that Act in respect of the trust for the 2016‑17 income year from 100%.
deferred notional gain has the meaning given by subsection (4).

Legislation Act 2003