Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p33
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 33/40)
Character Range: 114401–117224

gain if the part of the *capital proceeds from the *shares or interest that is reasonably attributable to the market value of property referred to in subsection (2) is more than the sum of the *cost bases of that property.

Note: You cannot make a capital loss.

 (7) This section applies to property that a company that is not an *Australian resident *acquired after 15 August 1989 from another company as if it were acquired before 20 September 1985 if:

 (a) the other company acquired it before 20 September 1985; and

 (b) the companies are members of the same *wholly‑owned group; and

 (c) the property does not have the *necessary connection with Australia.

 (8) In working out the *net value of a company or trust for the purposes of subsection (2), disregard:

 (a) the discharge or release of any liabilities; or

 (b) the market value of any *CGT assets acquired;

if the discharge or release, or the *acquisition, was done for a purpose that included ensuring that the requirement in subsection (2) would not be satisfied in a particular situation.

Exceptions

 (9) CGT event K6 does not happen if:

 (a) for a company referred to in subsection (2)—some of its *shares were listed for quotation in the official list of a stock exchange in Australia or a foreign country at the time of the other event and at all times in the period of 5 years before the time of the other event; or

 (b) for a trust referred to in subsection (2) that is a unit trust—some of its units were so listed, or were ordinarily available to the public for subscription or purchase, at the time of the other event and at all times in that period.

Division 106—Entity making the gain or loss

Table of Subdivisions

 Guide to Division 106

106‑A Partnerships

106‑B Bankruptcy and liquidation

106‑C Absolutely entitled beneficiaries

106‑D Security holders

Guide to Division 106

106‑1  What this Division is about

      This Division sets out the cases where a capital gain or loss is made by someone other than the entity to which a CGT event happens.

      The entities affected are:

        *        partnerships (Subdivision 106‑A);
        *        bankruptcy trustees and company liquidators (Subdivision 106‑B);
        *        trustees where there is an absolutely entitled beneficiary (Subdivision 106‑C);
        *        security holders (Subdivision 106‑D).

Subdivision 106‑A—Partnerships

106‑5  Partnerships

 (1) Any *capital gain or *capital loss from a *CGT event happening in relation to a partnership or one of its *CGT assets is made by the partners individually.

  Each partner's gain or loss is calculated by reference to the partnership agreement, or partnership law if there is no agreement.

Example 1: A partnership creates contractual rights in another entity (CGT event