Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_14:p8
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 14 (pt 8/40)
Character Range: 55731–58324

happens if your ownership of an intangible *CGT asset ends by the asset:

 (a) being redeemed or cancelled; or

 (b) being released, discharged or satisfied; or

 (c) expiring; or

 (d) being abandoned, surrendered or forfeited.

 (2) The time of the event is:

 (a) when you enter into the contract that results in the asset ending; or

 (b) if there is no contract—when the asset ends.

 (3) You make a capital gain if the *capital proceeds from the ending are more than the asset's *cost base. You make a capital loss if those *capital proceeds are less than the asset's *reduced cost base.

 (4) A lease is taken to have expired even if it is extended or renewed.

Exceptions

 (5) A *capital gain or *capital loss you make is disregarded if:

 (a) you *acquired the asset before 20 September 1985; or

 (b) for a lease:

 (i) it was granted before that day; or

 (ii) if it has been renewed or extended—the start of the last renewal or extension occurred before that day.

Note 1: There are other exceptions if:

                  * your lease expires and you did not use it mainly to produce assessable income: see section 118‑40; or

                  * you exercise rights to acquire shares or units: see section 130‑40; or

                  * you acquire shares or units by converting a convertible note: see section 130‑60; or

                  * you exercise an option: see section 134‑1.

Note 2: A company can agree to forgo any capital loss it makes as a result of forgiving a commercial debt owed to it by another company where the companies are under common ownership: see section 245‑90 of Schedule 2C to the Income Tax Assessment Act 1936.

Note 3: A capital gain or loss a company makes because shares in its 100% subsidiary are cancelled (an example of CGT event C2) on the liquidation of the subsidiary may be reduced if there was a roll‑over for a CGT asset under Subdivision 126‑B: see section 126‑85.

104‑30  End of option to acquire shares etc.: CGT event C3

 (1) CGT event C3 happens if an option a company or a trustee of a unit trust granted to an entity 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;

ends in one of these ways:

 (c) it is not exercised by the latest time for its exercise;

 (d) it is cancelled;

 (e) the entity releases or abandons it.

 (2) The time of the event is when the option ends.

 (3) The company or trustee makes a capital gain if the *capital proceeds from the grant of the option are more than the