Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p21
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 21/40)
Character Range: 86094–88590

*reduced cost base of that interest.

Exceptions

 (4) A *capital gain or *capital loss the lessor makes is disregarded if:

 (a) it *acquired the *CGT asset that is the land, or the lease to the lessor was granted, before 20 September 1985; or

 (b) the lease to the lessor has been renewed or extended and the last renewal or extension started before that day.

Note: For any later CGT event that happens to the land or the lessor's lease of it: see section 132‑10.

104‑120  Lessor pays lessee to get lease changed: CGT event F3

 (1) CGT event F3 happens if a lessor incurs expenditure in getting the lessee's agreement to vary or waive a term of the lease. The lessor makes a capital loss equal to the amount of expenditure it incurred. (The expenditure can include giving property: see section 103‑5.)

 (2) The time of the event is when the term is varied or waived.

Exception

 (3) However, this event does not apply to expenditure for a lease to which the lessor has chosen to apply section 104‑115.

104‑125  Lessee receives payment for changing lease: CGT event F4

 (1) CGT event F4 happens if a lessee receives a payment from the lessor for agreeing to vary or waive a term of the lease.

  The payment can include giving property: see section 103‑5.

 (2) The time of the event is when the term is varied or waived.

 (3) The lessee makes a capital gain if the *capital proceeds from the event are more than the lease's *cost base (at the time of the event). If the lessee makes a *capital gain, the lease's cost base is also reduced to nil.

Note: The lessee cannot make a capital loss.

 (4) On the other hand, if those *capital proceeds are less, the lease's *cost base is reduced by that amount at the time of the event.

Example: On 1 January 1999 a lessee enters a lease. On 1 May 1999 the lessee agrees to waive a term. The lessor pays the lessee $1,000 for this.

 If the lease's cost base at the time of the waiver is $2,500, it is reduced from $2,500 to $1,500.

 On 1 September 1999 the lessee agrees to waive another term. The lessor pays the lessee $2,000 for this.

 If the lease's cost base at the time of the waiver is $1,500, the lessee makes a capital gain of $500, and the cost base is reduced to nil.

Exceptions

 (5) A *capital gain the lessee makes is disregarded if:

 (a) the lease was granted before 20 September 1985; or

 (b) for a lease that has been renewed or extended—the start of the last renewal or extension occurred