Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_6:p9
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 9/10)
Character Range: 230850–233510

by:

 (a) any part of them that you repay; or

 (b) any compensation you pay that can reasonably be regarded as a repayment of part of them.

However, the *capital proceeds are not reduced by any part of the payment that you can deduct.

Example: You sell a block of land for $50,000 (the capital proceeds). The purchaser later finds out that you misrepresented a term in the contract. The purchaser sues you and the court orders you to pay $10,000 in damages to the purchaser.

 The capital proceeds are reduced by $10,000.

 (2) The payment can include giving property: see section 103‑5.

116‑55  Assumption of liability rule: modification 5

  The *capital proceeds from a *CGT event are increased if another entity *acquires the *CGT asset (the subject of the event) subject to a liability by way of security over the asset.

  They are increased by the amount of the liability the other entity assumes.

Example: You sell land for $150,000. You receive $50,000 (the capital proceeds) and the buyer becomes responsible for a $100,000 liability under an outstanding mortgage. The capital proceeds are increased by $100,000 to $150,000.

Special rules

116‑65  Disposal of a CGT asset the subject of an option

  If you *dispose of a *CGT asset because another entity exercises an option you granted in relation to the asset, the *capital proceeds from the disposal include any payment you received for granting the option.

  The payment can include giving property: see section 103‑5.

Note: This situation is an example of CGT event A1.

116‑70  Option requiring both acquisition and disposal

  If an option you granted requires you both to *acquire and *dispose of a *CGT asset, the option is treated as 2 separate options and half of the *capital proceeds from the grant is attributed to each option.

116‑75  Special rule for CGT event C2 happening to a lease

  The *capital proceeds from the expiry, surrender or forfeiture of a lease (an example of *CGT event C2) include any payment (because of the lease ending) by the lessor to the lessee for expenditure of a capital nature incurred by the lessee in making improvements to the leased property.

  The payment or expenditure can include giving property: see section 103‑5.

116‑80  Special rule if CGT asset is shares or an interest in a trust

 (1) This section sets out what happens if:

 (a) there is a fall in the market value of a *personal use asset (other than a car, motor cycle or similar vehicle) or a *collectable of a company or trust; and

 (b) *CGT event A1, C2 or E8 happens to:

 (i) *shares you own in the company (or in a company that is a member