Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

INCOME TAX ASSESSMENT ACT 1997 - SECT 116.10

Modifications to general rules

             (1)  There are 6 modifications to the general rules that may be relevant. The table in section 116- 25 lists which ones may be relevant to each CGT event listed in the table.

Explanation of modifications

             (2)  The first is a market value substitution rule. It is relevant if:

                        •   you receive no capital proceeds from a CGT event; or

                        •   some or all of the capital proceeds cannot be valued; or

                        •   you did not deal at arm's length with another entity in connection with the event.

             (3)  The second is an apportionment rule. It is relevant if a payment you receive in connection with a transaction relates in part only to a CGT event.

Example:    You sell 3 CGT assets for a total of $100,000. The $100,000 needs to be apportioned between the 3 assets.

             (4)  The third is a non-receipt rule. It is relevant if you do not receive, or are not likely to receive, some or all of the capital proceeds from a CGT event.

             (5)  The fourth is a repaid rule. It is relevant if you are required to repay some or all of the capital proceeds from a CGT event.

             (6)  The fifth is relevant only if another entity assumes a liability in connection with a CGT event.

             (7)  The sixth relates to misappropriation by an employee or agent. It is relevant if your employee or agent misappropriates all or part of the capital proceeds from a CGT event.

Note 1:       Also, these provisions of the Income Tax Assessment Act 1936 modify capital proceeds:

(a)    section 23B (undistributed FIF attribution income on disposal of an interest in a FIF);

(b)    sections 159GZZZF and 159GZZZG (cancellation of shares in a holding company);

(c)    sections 159GZZZQ and 159GZZZS (buy-backs of shares);

(d)    sections 401, 422, 423 and 461 (CFCs).

Note 2:       Section 230- 505 of this Act (Division 230 financial arrangement as consideration for provision or acquisition of a thing) also modifies capital proceeds.

General rules



AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback