Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 316.165

  (1)   This section applies if:

  (a)   a * CGT event happens to an interest of a beneficiary of the lost policy holders trust in that trust; and

  (b)   the * capital proceeds from the event include or consist of money received by the beneficiary.

  (2)   Work out whether the beneficiary makes a * capital gain or * capital loss from the * CGT event, and the amount of the gain or loss, assuming that:

  (a)   the * capital proceeds from the CGT event were the amount they would be if they did not include any * market value of property other than money; and

  (b)   the * cost base and * reduced cost base for the interest were the amount worked out using the formula:

Example:   Assume that the beneficiary of the lost policy holders trust is paid $50 in money by the trustee to satisfy the beneficiary's interest in the trust so that a CGT event happens, and that the valuation factor worked out under section   316 - 65 is 0.9. The beneficiary makes a capital gain from the event of $5, worked out as follows:

Note:   Division   114 (Indexation of cost base) is not relevant, because this section provides exhaustively for working out the amount of the cost base.

  (3)   The * capital gain or * capital loss is not to be disregarded, despite sections   316 - 55 and 316 - 160.

Note:   The capital gain is not a discount capital gain: see section   115 - 55.