Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p12
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 12/18)
Character Range: 2829497–2831947

asset at a given time if, at that time, you own it and:
 (a) it is either a *share in a company that is an Australian resident at that time or an interest in a trust that is a *resident trust for CGT purposes for the income year in which that time occurs; and
 (b) the total of:
 (i) the *market values of the active assets of the company or trust; and
 (ii) the market value of any financial instruments of the company or trust that are inherently connected with a business that the company or trust carries on; and
 (iii) any cash of the company or trust that is inherently connected with such a business;
  is 80% or more of the market value of all of the assets of the company or trust.
 (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.

Exceptions
 (4) However, the following *CGT assets cannot be active assets:
 (a) interests in an entity that is *connected with you, other than *shares and interests covered by subsection (3);
 (b) shares in a company, other than:
 (i) shares in a *widely held company that are covered by subsection (3), (3A) or (3B) and held by a *CGT concession stakeholder of the company; and
 (ii) shares in any other company that are covered by subsection (3), (3A) or (3B);
 (c) interests in a trust, other than:
 (i) interests in a trust to which subsection (5) applies that are covered by subsection (3), (3A) or (3B) and held by a CGT concession stakeholder of the trust; and
 (ii) interests in any other trust that are covered by subsection (3), (3A) or (3B);
 (d) financial instruments (such as loans, debentures, bonds, promissory notes, futures contracts, forward contracts, currency swap contracts