Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 116.45

Non-receipt rule: modification 3

             (1)  The * capital proceeds from a * CGT event are reduced if:

                     (a)  you are not likely to receive some or all (the unpaid amount ) of those proceeds; and

                     (b)  this is not because of anything you (or your * associate) have done or omitted to do; and

                     (c)  you took all reasonable steps to get the unpaid amount paid.

                   The capital proceeds are reduced by the unpaid amount.

Note:          This rule exists because the general rules treat you as having received an amount when you are entitled to receive it.

Example     You sell a painting to another entity for $5,000 (the capital proceeds). You agree to accept monthly instalments of $100.

                   You receive $2,000, but then the other entity stops making payments. It becomes clear that you are not likely to receive the remaining $3,000. The capital proceeds are reduced to $2,000.

             (2)  There is a further consequence if:

                     (a)  those proceeds are reduced by the unpaid amount; but

                     (b)  you later receive a part of that amount.

                   Those proceeds are increased by that part.

             (3)  This Part and Part 3-3 apply to the debt owed to you (the unpaid amount) as if it were not a * CGT asset.



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