Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_3:p5
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 5/17)
Character Range: 245270–247899

a dividend under section 159GZZZP of the Income Tax Assessment Act 1936 (which relates to buy‑backs of *shares); or

 (b) an amount included in assessable income under section 160AQT of that Act (which relates to franked dividends).

 (2) The gain is reduced to zero if it does not exceed:

 (a) the amount included; or

 (b) if you are a partner, your share (the partner's share) of the amount included in the assessable income or *exempt income of the partnership (calculated according to your entitlement to share in the partnership net income or loss).

Example: Liz bought some land in 1990, as part of a profit‑making scheme. In December 1998 she sells it.

 Her profit from the sale is $40,000 and is included in her assessable income under section 6‑5 (about ordinary income).

 Suppose she made a capital gain from the sale of $30,000. It is reduced to zero because it is does not exceed the amount included.

 (3) The gain is reduced by the amount included, or the amount of the partner's share, if the gain exceeds that amount.

Note: These rules are modified for complying superannuation funds that become non‑complying and for non‑resident superannuation funds that become resident: see Part IX of the Income Tax Assessment Act 1936.

 (4) A *capital gain you make from a *CGT event is reduced by the extent that a provision of this Act treats:

 (a) an amount of your *ordinary income or *statutory income from the event as being neither assessable income nor *exempt income; or

 (b) if you are a partner, your share of the ordinary income or *statutory income of the partnership from the event (calculated according to your entitlement to share in the partnership net income or loss) as being neither assessable income nor *exempt income of the partnership.

Note: An example of a provision of this kind is section 121EG (about offshore banking units) of the Income Tax Assessment Act 1936.

 (4A) A *capital gain the trustee of a *superannuation fund makes from a *CGT event happening in relation to a *CGT asset in an income year is reduced if the asset's market value was taken into account in working out the fund's net previous income for earlier income years under section 288A or 288B of the Income Tax Assessment Act 1936.

 (4B) The gain is reduced to zero if it does not exceed the amount that would have been the *capital gain from the *CGT event if the *capital proceeds from the event were the asset's market value that was taken into account in working out that net previous income.

If the gain exceeds that amount, it is reduced by that amount.

Exceptions

 (5) The gain is not