Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) CGT event D2 happens if you grant an option to an entity, or renew or extend an option you had granted.
Note: Some options are not covered: see subsections (6) and (7).
(2) The time of the event is when you grant, renew or extend the option.
(3) You make a capital gain if the * capital proceeds from the grant, renewal or extension of the option are more than the expenditure you incurred to grant, renew or extend it. You make a capital loss if those capital proceeds are less .
(4) The expenditure can include giving property: see section 103 - 5. However, it does not include an amount you have received as * recoupment of it and that is not included in your assessable income, or an amount to the extent that you have deducted or can deduct it.
Exceptions
(5) A * capital gain or * capital loss you make from the grant, renewal or extension of the option is disregarded if the option is exercised.
Note 1: Section 134 - 1 sets out the consequences of an option being exercised.
Note 2: A capital gain or capital loss you made for the 1997 - 98 income year or an earlier income year under former Part IIIA of the Income Tax Assessment Act 1936 is also disregarded where the option is exercised in the 1998 - 99 income year or a later one: see section 104 - 40 of the Income Tax (Transitional Provisions) Act 1997 .
(6) This section does not apply to an option granted, renewed or extended by a company or the trustee of a unit trust to * acquire a * CGT asset that is:
(a) * shares in the company or units in the unit trust; or
(b) debentures of the company or unit trust.
Note: Section 104 - 30 deals with this situation.
(7) Nor does it apply to an option relating to a * personal use asset or a * collectable.