Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p14
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 14/40)
Character Range: 1858637–1861068

term is varied or waived.

Exception
 (3) However, this event does not apply to expenditure for a lease to which the lessor has chosen to apply section 104‑115.

104‑125  Lessee receives payment for changing lease: CGT event F4
 (1) CGT event F4 happens if a lessee receives a payment from the lessor for agreeing to vary or waive a term of the lease.
  The payment can include giving property: see section 103‑5.
 (2) The time of the event is when the term is varied or waived.
 (3) The lessee makes a capital gain if the *capital proceeds from the event are more than the lease's *cost base (at the time of the event). If the lessee makes a *capital gain, the lease's cost base is also reduced to nil.
Note: The lessee cannot make a capital loss.
 (4) On the other hand, if those *capital proceeds are less, the lease's *cost base is reduced by that amount at the time of the event.
Example: On 1 January 1999 a lessee enters a lease. On 1 May 1999 the lessee agrees to waive a term. The lessor pays the lessee $1,000 for this.
 If the lease's cost base at the time of the waiver is $2,500, it is reduced from $2,500 to $1,500.
 On 1 September 1999 the lessee agrees to waive another term. The lessor pays the lessee $2,000 for this.
 If the lease's cost base at the time of the waiver is $1,500, the lessee makes a capital gain of $500, and the cost base is reduced to nil.

Exceptions
 (5) A *capital gain the lessee makes is disregarded if:
 (a) the lease was granted before 20 September 1985; or
 (b) for a lease that has been renewed or extended—the start of the last renewal or extension occurred before that day.

104‑130  Lessor receives payment for changing lease: CGT event F5
 (1) CGT event F5 happens if a lessor receives a payment from the lessee for agreeing to vary or waive a term of the lease.
  The payment can include giving property: see section 103‑5.
 (2) The time of the event is when the term is varied or waived.
 (3) The lessor makes a capital gain if the *capital proceeds from the event are more than the expenditure the lessor incurs in relation to the variation or waiver. The lessor makes a capital loss if those capital proceeds are less.
Example: You own a shopping centre. The lessee of a shop in the centre pays you $10,000 for agreeing to change the terms of its lease. You incur expenses of $1,000 for a solicitor and $500 for a valuer. You make a capital gain of $8,500.
 (4) The expenditure