Document ID: chunk:federal_register_of_legislation:C2010C00637:clause:6_3:p1
Version: federal_register_of_legislation:C2010C00637
Segment Type: clause
Provision Reference: sch 6 cl 3 (pt 1/2)
Character Range: 40537–43001

3  Section 115‑45
Repeal the section, substitute:

115‑45  Capital gain from equity in an entity with newly acquired assets

Purpose of this section

 (1) The purpose of this section is to deny you a *discount capital gain on your *share in a company or interest in a trust if you would not have had *discount capital gains on the majority of *CGT assets (by cost and by value) underlying the share or interest if:
 (a) you had owned them for the time the company or trust did; and
 (b) *CGT events had happened to them when the CGT event happened to your share or interest.

When a capital gain is not a discount capital gain

 (2) Your *capital gain from a *CGT event happening to:
 (a) your *share in a company; or
 (b) your *trust voting interest, unit or other fixed interest in a trust;
is not a discount capital gain if the 3 conditions in subsections (3), (4) and (5) are met. This section has effect despite section 115‑5 and subsection 115‑30(2).

Note: This section does not prevent a capital gain from being a discount capital gain if:

(a) there are at least 300 members or beneficiaries of the company or trust and control of the company or trust is not and cannot be concentrated (see section 115‑50); or

(b) the capital gain is from CGT event E4 due to payments from the discounted parts of the trust's discount capital gains (see section 115‑60).

You had at least 10% of the equity in the entity before the event

 (3) The first condition is that, just before the *CGT event, you and your *associates beneficially owned:
 (a) at least 10% by value of the *shares in the company (except shares that carried a right only to participate in a distribution of profits or capital to a limited extent); or
 (b) at least 10% of the *trust voting interests, issued units or other fixed interests (as appropriate) in the trust.

Cost bases of new assets are more than 50% of all cost bases of entity's assets

 (4) The second condition is that the total of the *cost bases of *CGT assets that the company or trust owned at the time of the *CGT event and had *acquired less than 12 months before then is more than half of the total of the *cost bases of the *CGT assets the company or trust owned at the time of the event.

Note: Section 115‑30 may affect the time when the company or trust is treated as having acquired a CGT asset.

Net capital gain on entity's new assets would be more than 50% of net capital gain on all the entity's assets

 (5)