Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p10
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 10/40)
Character Range: 60507–63047

requires you to do something that is another *CGT event that happens to you; or

 (c) a company issues or allots *shares to you; or

 (d) the trustee of a unit trust issues units in the trust to you.

Example: You agree to sell land. You have created a contractual right in the buyer to enforce completion of the transaction. The sale results in you disposing of the land, an example of CGT event A1. This means that a gain or loss from CGT event D1 is disregarded.

104‑40  Granting an option: CGT event D2

 (1) CGT event D2 happens if you grant an option to an entity, or renew or extend an option you had granted.

Note: Some options are not covered: see subsections (6) and (7).

 (2) The time of the event is when you grant, renew or extend the option.

 (3) You make a capital gain if the *capital proceeds from the grant, renewal or extension of the option are more than the expenditure you incurred to grant, renew or extend it. You make a capital loss if those *capital proceeds are less.

 (4) The expenditure can include giving property: see section 103‑5. However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income, or an amount to the extent that you have deducted or can deduct it.

Exceptions

 (5) A *capital gain or *capital loss you make from the grant, renewal or extension of the option is disregarded if the other entity exercises the option.

Note: Section 134‑1 sets out the consequences of an option being exercised.

 (6) This section does not apply to an option granted, renewed or extended by a company or the trustee of a unit trust to *acquire a *CGT asset that is:

 (a) *shares in the company or units in the unit trust; or

 (b) debentures of the company or unit trust.

Note: Section 104‑30 deals with this situation.

 (7) Nor does it apply to an option relating to a *personal use asset or a *collectable.

104‑45  Granting a right to income from mining: CGT event D3

 (1) CGT event D3 happens if you own a *prospecting entitlement or *mining entitlement, or an interest in one, and you grant another entity a right to receive *ordinary income or *statutory income from operations permitted to be carried on by the entitlement.

Note: If this event applies, there is no disposal of the entitlement.

 (2) The time of the event is:

 (a) when you enter into the contract with the other entity; or

 (b) if there is no contract—when you grant the right to receive *ordinary income or *statutory income.

 (3)