Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_10:p6
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 10 (pt 6/7)
Character Range: 177193–179899

CGT asset.

112‑5  Discussion of modifications

 (1) Modifications can occur from the time you acquired the CGT asset to when a CGT event happens in relation to it.

Note: You should keep records of the modifications: see Division 121.

 (2) Most modifications replace the first element (what you paid for a CGT asset) of the cost base and reduced cost base of the asset.

 (3) Subdivision 112‑A contains operative provisions setting out the general situations that may result in a modification to the general rules.

 (4) Subdivision 112‑B (which is a guide) has a number of tables (each one covering a specialist topic) that tell you each situation that may result in a modification to the general rules.

 (5) Subdivision 112‑C (which is a guide) explains what a replacement‑asset roll‑over is and how it can modify the cost base or reduced cost base.

 (6) Subdivision 112‑D (which is a guide) explains what a same‑asset roll‑over is and how it can modify the cost base or reduced cost base.

Subdivision 112‑A—General modifications

Table of sections

112‑15 General rule for replacement modifications
112‑20 Market value substitution rule
112‑25 Split, changed or merged assets
112‑30 Apportionment rules on acquisition or disposal of part
112‑35 Assumption of liability rule

112‑15  General rule for replacement modifications

  If a cost base modification replaces an element of the *cost base of a *CGT asset with an amount, this Part and Part 3‑3 apply to you as if you had paid that amount.

Example: An individual pays $10,000 to acquire an option. The individual dies and the option devolves to his legal personal representative, who exercises the option.

 Section 134‑1 applies to the legal personal representative as if the representative had paid $10,000 for the option.

112‑20  Market value substitution rule

 (1) The first element of your *cost base and *reduced cost base of a *CGT asset you *acquire from another entity is its market value (at the time of acquisition) if:

 (a) you did not incur expenditure to acquire it; or

 (b) some or all of the expenditure you incurred to acquire it cannot be valued; or

 (c) you did not deal at arm's length with the other entity in connection with the acquisition.

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

 (2) Despite paragraph (1)(c), if you did not deal at arm's length with the other entity and:

 (a) your *acquisition of the *CGT asset resulted from *CGT event D1 happening; or

 (b) the *CGT asset is a *share in a company that was issued or allotted to you by the company; or

 (c) the *CGT asset is a unit in a unit trust issued to you by the trustee of the unit trust;

the