Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_6:p3
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 3/10)
Character Range: 214424–217076

it.

Note: The surviving joint tenant is taken to have acquired the deceased's interest in the asset: see section 128‑50.

CGT event J1

 (8) If *CGT event J1 happens, the company that owns the roll‑over asset ignores (for indexation purposes) the acquisition rule in subsection 104‑175(8).

114‑15  Cost base modifications

 (1) There are a number of modifications to the *cost base of *CGT assets (see sections 112‑20 and 112‑35 and Subdivisions 112‑B, 112‑C and 112‑D). These affect the way indexation works.

 (2) If a cost base modification replaces an element of the *cost base of a *CGT asset with an amount, or includes an amount in such an element, you index the element or the amount as if expenditure equal to the amount had been incurred in the quarter in which the modification occurred.

Example: A trust is declared over a CGT asset (an example of CGT event E1). The first element of the cost base in the hands of the trustee is its market value. The trustee indexes that market value from the quarter in which the trust was declared.

 (3) A different rule applies if a cost base modification reduces the total *cost base of a *CGT asset.

      Method statement

           Step 1. Work out the *cost base (all elements) of the asset as at the quarter in which the modification occurred.

           Step 2. Subtract the amount of the reduction.

           Step 3. The Step 2 amount forms a new first element of your *cost base, and is later indexed as if you had incurred expenditure equal to that amount in the quarter in which the modification occurred.

Example: Margaret receives a capital payment of $1,000 for shares (an example of CGT event G1). The first element of her cost base is $10,250 (indexed to the quarter in which the payment was made) and the second element (similarly indexed) is $210. Add those amounts ($10,460) and subtract the $1,000. Her new first element of the cost base is $9,460. There are no other elements at that time.

114‑20  When expenditure is incurred for roll‑overs

  If there is a roll‑over for a *CGT event happening in relation to a *CGT asset and the first element of the *cost base of the asset is the whole of the cost base of:

 (a) for a *replacement‑asset roll‑over, the original asset; or

 (b) for a *same‑asset roll‑over, the CGT asset;

you index that element as if expenditure equal to the amount in that element had been incurred in the quarter in which the CGT event happened.

Division 116—Capital proceeds

Guide to Division 116

116‑1  What this Division is about

      This Division tells you how to work out what the capital proceeds from a CGT