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INCOME TAX ASSESSMENT ACT 1997 - SECT 115.25

Discount capital gain must be on asset acquired at least 12 months before

  (1)   To be a * discount capital gain, the * capital gain must result from a * CGT event happening to a * CGT asset that was * acquired by the entity making the capital gain at least 12 months before the CGT event.

Note 1:   Even if the capital gain results from a CGT event happening at least a year after the CGT asset was acquired, the gain may not be a discount capital gain, depending on the cause of the CGT event (see section   115 - 40) and the nature of the asset (see sections   115 - 45 and 115 - 50).

Note 2:   Section   115 - 30 or 115 - 34 may affect the time when the entity is treated as having acquired the CGT asset.

  (2)   To avoid doubt, subsection   (1) applies to the * CGT asset shown in the table for a * CGT event listed in the table.

 

CGT assets to which subsection   (1) applies

Item

CGT event

CGT asset to which subsection   (1) applies

1A

D4

the land over which the * conservation covenant is entered into

1

E8

the interest or part   interest in the trust capital

2

K6

the * share or interest * acquired before 20   September 1985

  (2A)   If the * capital gain results from a * CGT event K9 happening:

  (a)   subsection   (1) does not apply; and

  (b)   to be a * discount capital gain, the * carried interest to which the CGT event relates must arise under a partnership agreement entered into at least 12 months before the CGT event.

  (3)   A * capital gain from one of these * CGT events is not a discount capital gain (despite section   115 - 5):

  (a)   * CGT event D1;

  (b)   * CGT event D2;

  (c)   * CGT event D3;

  (d)   * CGT event E9;

  (e)   * CGT event F1;

  (f)   * CGT event F2;

  (g)   * CGT event F5;

  (h)   * CGT event H2;

  (ha)   * CGT event J2;

  (hb)   * CGT event J5;

  (hc)   * CGT event J6;

  (i)   * CGT event K10.

Note:   Capital gains from the CGT events mentioned in paragraphs   (3)(a) to (f) are not discount capital gains because the CGT asset involved in the CGT event comes into existence at the time of the event, so it is impossible to meet the requirement in this section that the asset have been acquired at least 12 months before the event.



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