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Income Tax Assessment Act 1997
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Administered by
Department of the Treasury
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C2024C00571 (C252)
01 October 2024
-
01 October 2024
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Volume 1
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Chapter 1—Introduction and core provisions
Part 1 1—Preliminary
Division 1—Preliminary
1 1 Short title
1 2 Commencement
1 3 Differences in style not to affect meaning
1 4 Application
1 7 Administration of this Act
Part 1 2—A Guide to this Act
Division 2—How to use this Act
Subdivision 2 A—How to find your way around
2 1 The design
Subdivision 2 B—How the Act is arranged
2 5 The pyramid
Subdivision 2 C—How to identify defined terms and find the definitions
2 10 When defined terms are identified
2 15 When terms are not identified
2 20 Identifying the defined term in a definition
Subdivision 2 D—The numbering system
2 25 Purposes
2 30 Gaps in the numbering
Subdivision 2 E—Status of Guides and other non operative material
2 35 Non operative material
2 40 Guides
2 45 Other material
Division 3—What this Act is about
3 5 Annual income tax
3 10 Your other obligations as a taxpayer
3 15 Your obligations other than as a taxpayer
Part 1 3—Core provisions
Division 4—How to work out the income tax payable on your taxable income
4 1 Who must pay income tax
4 5 Meaning of you
4 10 How to work out how much income tax you must pay
4 15 How to work out your taxable income
4 25 Special provisions for working out your basic income tax liability
Division 5—How to work out when to pay your income tax
Guide to Division 5
5 1 What this Division is about
Subdivision 5 A—How to work out when to pay your income tax
5 5 When income tax is payable
5 10 When shortfall interest charge is payable
5 15 General interest charge payable on unpaid income tax or shortfall interest charge
Division 6—Assessable income and exempt income
Guide to Division 6
6 1 Diagram showing relationships among concepts in this Division
Operative provisions
6 5 Income according to ordinary concepts (ordinary income)
6 10 Other assessable income (statutory income)
6 15 What is not assessable income
6 20 Exempt income
6 23 Non assessable non exempt income
6 25 Relationships among various rules about ordinary income
Division 8—Deductions
8 1 General deductions
8 5 Specific deductions
8 10 No double deductions
Part 1 4—Checklists of what is covered by concepts used in the core provisions
Division 9—Entities that must pay income tax
9 1A Effect of this Division
9 1 List of entities
9 5 Entities that work out their income tax by reference to something other than taxable income
Division 10—Particular kinds of assessable income
10 1 Effect of this Division
10 5 List of provisions about assessable income
Division 11—Particular kinds of non assessable income
Subdivision 11 A—Lists of classes of exempt income
11 1A Effect of this Subdivision
11 1 Overview
11 5 Entities that are exempt, no matter what kind of ordinary or statutory income they have
11 15 Ordinary or statutory income which is exempt
Subdivision 11 B—Particular kinds of non assessable non exempt income
11 50 Effect of this Subdivision
11 55 List of non assessable non exempt income provisions
Division 12—Particular kinds of deductions
12 1 Effect of this Division
12 5 List of provisions about deductions
Division 13—Tax offsets
13 1A Effect of this Division
13 1 List of tax offsets
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Chapter 2—Liability rules of general application
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Part 2 1—Assessable income
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Division 15—Some items of assessable income
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Guide to Division 15
15 1 What this Division is about
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Operative provisions
15 2 Allowances and other things provided in respect of employment or services
15 3 Return to work payments
15 5 Accrued leave transfer payments
15 10 Bounties and subsidies
15 15 Profit making undertaking or plan
15 20 Royalties
15 22 Payments made to members of a copyright collecting society
15 23 Payments of resale royalties by resale royalty collecting society
15 25 Amount received for lease obligation to repair
15 30 Insurance or indemnity for loss of assessable income
15 35 Interest on overpayments and early payments of tax
15 40 Providing mining, quarrying or prospecting information or geothermal exploration information
15 45 Amounts paid under forestry agreements
15 46 Amounts paid under forestry managed investment schemes
15 50 Work in progress amounts
15 55 Certain amounts paid under funeral policy
15 60 Certain amounts paid under scholarship plan
15 70 Reimbursed car expenses
15 75 Bonuses
15 80 Franked distributions entitled to a foreign income tax deduction—Additional Tier 1 capital exception
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Division 17—Effect of GST etc. on assessable income
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Guide to Division 17
17 1 What this Division is about
17 5 GST and increasing adjustments
17 10 Certain decreasing adjustments
17 15 Elements in calculation of amounts
17 20 GST groups and GST joint ventures
17 30 Special credits because of indirect tax transition
17 35 Certain sections not to apply to certain assets or expenditure
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Division 20—Amounts included to reverse the effect of past deductions
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Guide to Division 20
20 1 What this Division is about
20 5 Other provisions that reverse the effect of deductions
Subdivision 20 A—Insurance, indemnity or other recoupment for deductible expenses
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Guide to Subdivision 20 A
20 10 What this Subdivision is about
20 15 How to use this Subdivision
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What is an assessable recoupment?
20 20 Assessable recoupments
20 25 What is recoupment?
20 30 Tables of deductions for which recoupments are assessable
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How much is included in your assessable income?
20 35 If the expense is deductible in a single income year
20 40 If the expense is deductible over 2 or more income years
20 45 Effect of balancing charge
20 50 If the expense is only partially deductible
20 55 Meaning of previous recoupment law
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What if you can deduct a loss or outgoing incurred by another entity?
20 60 If you are the only entity that can deduct an amount for the loss or outgoing
20 65 If 2 or more entities can deduct amounts for the loss or outgoing
Subdivision 20 B—Disposal of a car for which lease payments have been deducted
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Guide to Subdivision 20 B
20 100 What this Subdivision is about
20 105 Map of this Subdivision
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The usual case
20 110 Disposal of a leased car for profit
20 115 Working out the profit on the disposal
20 120 Meaning of notional depreciation
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The associate case
20 125 Disposal of a leased car for profit
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Successive leases
20 130 Successive leases
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Previous disposals of the car
20 135 No amount included if earlier disposal for market value
20 140 Reducing the amount to be included if there has been an earlier disposal
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Miscellaneous rules
20 145 No amount included if you inherited the car
20 150 Reducing the amount to be included if another provision requires you to include an amount for the disposal
20 155 Exception for particular cars taken on hire
20 157 Exception for small business entities
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Disposals of interests in a car: special rules apply
20 160 Disposal of an interest in a car
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Part 2 5—Rules about deductibility of particular kinds of amounts
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Division 25—Some amounts you can deduct
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Guide to Division 25
25 1 What this Division is about
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Operative provisions
25 5 Tax related expenses
25 10 Repairs
25 15 Amount paid for lease obligation to repair
25 20 Lease document expenses
25 25 Borrowing expenses
25 30 Expenses of discharging a mortgage
25 35 Bad debts
25 40 Loss from profit making undertaking or plan
25 45 Loss by theft etc.
25 47 Misappropriation where a balancing adjustment event occurs
25 50 Payments of pensions, gratuities or retiring allowances
25 55 Payments to associations
25 60 Parliament election expenses
25 65 Local government election expenses
25 70 Deduction for election expenses does not extend to entertainment
25 75 Rates and land taxes on premises used to produce mutual receipts
25 85 Certain returns in respect of debt interests
25 90 Deduction relating to foreign non assessable non exempt income
25 95 Deduction for work in progress amounts
25 100 Travel between workplaces
25 110 Capital expenditure to terminate lease etc.
25 115 Deduction for payment of rent from land investment by operating entity to asset entity in relation to approved economic infrastructure facility
25 120 Transitional—deduction for payment of rent from land investment by operating entity to asset entity
25 125 COVID 19 tests
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Division 26—Some amounts you cannot deduct, or cannot deduct in full
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Guide to Division 26
26 1 What this Division is about
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Operative provisions
26 5 Penalties
26 10 Leave payments
26 15 Franchise fees windfall tax
26 17 Commonwealth places windfall tax
26 19 Rebatable benefits
26 20 Assistance to students
26 22 Political contributions and gifts
26 25 Interest or royalty
26 25A Payments to employees—labour mobility programs
26 26 Non share distributions and dividends
26 30 Relative’s travel expenses
26 31 Travel related to use of residential premises as residential accommodation
26 35 Reducing deductions for amounts paid to related entities
26 40 Maintaining your family
26 45 Recreational club expenses
26 47 Non business boating activities
26 50 Expenses for a leisure facility
26 52 Bribes to foreign public officials
26 53 Bribes to public officials
26 54 Expenditure relating to illegal activities
26 55 Limit on deductions
26 60 Superannuation contributions surcharge
26 68 Loss from disposal of eligible venture capital investments
26 70 Loss from disposal of venture capital equity
26 75 Excess non concessional contributions tax cannot be deducted
26 80 Financing costs on loans to pay superannuation contribution
26 85 Borrowing costs on loans to pay life insurance premiums
26 90 Superannuation supervisory levy
26 95 Superannuation guarantee charge
26 96 Laminaria and Corallina decommissioning levy cannot be deducted
26 97 National Disability Insurance Scheme expenditure
26 98 Division 293 tax cannot be deducted
26 99 Excess transfer balance tax cannot be deducted
26 100 Expenditure attributable to water infrastructure improvement payments
26 102 Expenses associated with holding vacant land
26 105 Non compliant payments for work and services
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Division 27—Effect of input tax credits etc. on deductions
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Guide to Division 27
27 1 What this Division is about
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Subdivision 27 A—General
27 5 Input tax credits and decreasing adjustments
27 10 Certain increasing adjustments
27 15 GST payments
27 20 Elements in calculation of amounts
27 25 GST groups and GST joint ventures
27 35 Certain sections not to apply to certain assets or expenditure
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Subdivision 27 B—Effect of input tax credits etc. on capital allowances
27 80 Cost or opening adjustable value of depreciating assets reduced for input tax credits
27 85 Cost or opening adjustable value of depreciating assets reduced: decreasing adjustments
27 87 Certain decreasing adjustments included in assessable income
27 90 Cost or opening adjustable value of depreciating assets increased: increasing adjustments
27 92 Certain increasing adjustments can be deducted
27 95 Balancing adjustment events
27 100 Pooling
27 105 Other Division 40 expenditure
27 110 Input tax credit etc. relating to 2 or more things
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Division 28—Car expenses
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Guide to Division 28
28 1 What this Division is about
28 5 Map of this Division
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Subdivision 28 A—Deductions for car expenses
28 10 Application of Division 28
28 12 Car expenses
28 13 Meaning of car expense
Subdivision 28 B—Choosing which method to use
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Guide to Subdivision 28 B
28 14 What this Subdivision is about
28 15 Choosing between the 2 methods
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Operative provision
28 20 Rules governing choice of method
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Subdivision 28 C—The “cents per kilometre” method
28 25 How to calculate your deduction
28 30 Capital allowances
28 35 Substantiation
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Subdivision 28 F—The “log book” method
28 90 How to calculate your deduction
28 95 Eligibility
28 100 Substantiation
Subdivision 28 G—Keeping a log book
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Guide to Subdivision 28 G
28 105 What this Subdivision is about
28 110 Steps for keeping a log book
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Operative provisions
28 115 Income years for which you need to keep a log book
28 120 Choosing the 12 week period for a log book
28 125 How to keep a log book
28 130 Replacing one car with another
Subdivision 28 H—Odometer records for a period
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Guide to Subdivision 28 H
28 135 What this Subdivision is about
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Operative provision
28 140 How to keep odometer records for a car for a period
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Subdivision 28 I—Retaining the log book and odometer records
28 150 Retaining the log book for the retention period
28 155 Retaining odometer records
Subdivision 28 J—Situations where you cannot use, or do not need to use, one of the 2 methods
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Guide to Subdivision 28 J
28 160 What this Subdivision is about
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Operative provisions
28 165 Exception for particular cars taken on hire
28 170 Exception for particular cars used in particular ways
28 175 Further miscellaneous exceptions
28 180 Car expenses related to award transport payments
28 185 Application of Subdivision 28 J to recipients and payers of certain withholding payments
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Division 30—Gifts or contributions
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Guide to Division 30
30 1 What this Division is about
30 5 How to find your way around this Division
30 10 Index
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Subdivision 30 A—Deductions for gifts or contributions
30 15 Table of gifts or contributions that you can deduct
30 17 Requirements for certain recipients
Subdivision 30 B—Tables of recipients for deductible gifts
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Health
30 20 Health
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Education
30 25 Education
30 30 Gifts that must be for certain purposes
30 35 Rural schools hostel buildings
30 37 Scholarship etc. funds
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Research
30 40 Research
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Welfare and rights
30 45 Welfare and rights
30 45A Australian disaster relief funds—declarations by Minister
30 46 Australian disaster relief funds—declarations under State and Territory law
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Defence
30 50 Defence
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Environment
30 55 The environment
30 60 Gifts to a National Parks body or conservation body must satisfy certain requirements
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Industry, trade and design
30 65 Industry, trade and design
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The family
30 70 The family
30 75 Marriage education organisations must be approved
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International affairs
30 80 International affairs
30 85 Developing country relief funds
30 86 Developed country disaster relief funds
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Sports and recreation
30 90 Sports and recreation
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Philanthropic trusts
30 95 Philanthropic trusts
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Cultural organisations
30 100 Cultural organisations
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Fire and emergency services
30 102 Fire and emergency services
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Other recipients
30 105 Other recipients
30 110 Community charities
Subdivision 30 BA—Endorsement of deductible gift recipients
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Guide to Subdivision 30 BA
30 115 What this Subdivision is about
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Endorsement as a deductible gift recipient
30 120 Endorsement by Commissioner
30 125 Entitlement to endorsement
30 130 Maintaining a gift fund
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Government entities treated like entities
30 180 How this Subdivision applies to government entities
Subdivision 30 C—Rules applying to particular gifts of property
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Valuation requirements
30 200 Getting written valuations
30 205 Proceeds of the sale would have been assessable
30 210 Approved valuers
30 212 Valuations by the Commissioner
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Working out the amount you can deduct for a gift of property
30 215 How much you can deduct
30 220 Reducing the amount you can deduct
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Joint ownership of property
30 225 Gift of property by joint owners
Subdivision 30 CA—Administrative requirements relating to ABNs
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Guide to Subdivision 30 CA
30 226 What this Subdivision is about
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Requirements
30 227 Entities to which this Subdivision applies
30 228 Content of receipt for gift or contribution
30 229 Australian Business Register must show deductibility of gifts to deductible gift recipient
Subdivision 30 DA—Donations to political parties and independent candidates and members
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Guide to Subdivision 30 DA
30 241 What this Subdivision is about
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Operative provisions
30 242 Deduction for political contributions and gifts
30 243 Amount of the deduction
30 244 When an individual is an independent candidate
30 245 When an individual is an independent member
Subdivision 30 DB—Spreading certain gift and covenant deductions over up to 5 income years
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Guide to Subdivision 30 DB
30 246 What this Subdivision is about
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Operative provisions
30 247 Gifts and covenants for which elections can be made
30 248 Making an election
30 249 Effect of election
30 249A Requirements—environmental property gifts
30 249B Requirements—heritage property gifts
30 249D Requirements—conservation covenants
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Subdivision 30 G—Index to this Division
30 315 Index
30 320 Effect of this Subdivision
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Division 31—Conservation covenants
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Guide to Division 31
31 1 What this Division is about
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Operative provisions
31 5 Deduction for entering into conservation covenant
31 10 Requirements for fund, authority or institution
31 15 Valuations by the Commissioner
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Division 32—Entertainment expenses
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Guide to Division 32
32 1 What this Division is about
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Subdivision 32 A—No deduction for entertainment expenses
32 5 No deduction for entertainment expenses
32 10 Meaning of entertainment
32 15 No deduction for property used for providing entertainment
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Subdivision 32 B—Exceptions
32 20 The main exception—fringe benefits
32 25 The tables set out the other exceptions
32 30 Employer expenses
32 35 Seminar expenses
32 40 Entertainment industry expenses
32 45 Promotion and advertising expenses
32 50 Other expenses
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Subdivision 32 C—Definitions relevant to the exceptions
32 55 In house dining facility (employer expenses table items 1.1 and 1.2)
32 60 Dining facility (employer expenses table item 1.3)
32 65 Seminars (seminar expenses table item 2.1)
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Subdivision 32 D—In house dining facilities (employer expenses table item 1.2)
32 70 $30 is assessable for each meal provided to non employee in an in house dining facility
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Subdivision 32 E—Anti avoidance
32 75 Commissioner may treat you as having incurred entertainment expense
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Subdivision 32 F—Special rules for companies and partnerships
32 80 Company directors
32 85 Directors, employees and property of wholly owned group company
32 90 Partnerships
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Division 34—Non compulsory uniforms
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Guide to Division 34
34 1 What this Division is about
34 3 What you need to read
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Subdivision 34 A—Application of Division 34
34 5 This Division applies to employees and others
34 7 This Division applies to employers and others
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Subdivision 34 B—Deduction for your non compulsory uniform
34 10 What you can deduct
34 15 What is a non compulsory uniform?
34 20 What are occupation specific clothing and protective clothing?
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Subdivision 34 C—Registering the design of a non compulsory uniform
34 25 Application to register the design
34 30 Industry Secretary’s decision on application
34 33 Written notice of decision
34 35 When uniform becomes registered
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Subdivision 34 D—Appeals from Industry Secretary’s decision
34 40 Review of decisions by the Administrative Appeals Tribunal
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Subdivision 34 E—The Register of Approved Occupational Clothing
34 45 Keeping of the Register
34 50 Changes to the Register
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Subdivision 34 F—Approved occupational clothing guidelines
34 55 Approved occupational clothing guidelines
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Subdivision 34 G—The Industry Secretary
34 60 Industry Secretary to give Commissioner information about entries
34 65 Delegation of powers by Industry Secretary
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Division 35—Deferral of losses from non commercial business activities
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Guide to Division 35
35 1 What this Division is about
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Operative provisions
35 5 Object
35 10 Deferral of deductions from non commercial business activities
35 15 Modification if you have exempt income
35 20 Modification if you become bankrupt
35 25 Application of Division to certain partnerships
35 30 Assessable income test
35 35 Profits test
35 40 Real property test
35 45 Other assets test
35 50 Apportionment
35 55 Commissioner’s discretion
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Division 36—Tax losses of earlier income years
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Guide to Division 36
36 1 What this Division is about
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Subdivision 36 A—Deductions for tax losses of earlier income years
36 10 How to calculate a tax loss for an income year
36 15 How to deduct tax losses of entities other than corporate tax entities
36 17 How to deduct tax losses of corporate tax entities
36 20 Net exempt income
36 25 Special rules about tax losses
Subdivision 36 B—Effect of you becoming bankrupt
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Guide to Subdivision 36 B
36 30 What this Subdivision is about
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Operative provisions
36 35 No deduction for tax loss incurred before bankruptcy
36 40 Deduction for amounts paid for debts incurred before bankruptcy
36 45 Limit on deductions for amounts paid
Subdivision 36 C—Excess franking offsets
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Guide to Subdivision 36 C
36 50 What this Subdivision is about
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Operative provision
36 55 Converting excess franking offsets into tax loss
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Volume 2
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Chapter 2—Liability rules of general application
Part 2 10—Capital allowances: rules about deductibility of capital expenditure
Division 40—Capital allowances
Guide to Division 40
40 1 What this Division is about
40 10 Simplified outline of this Division
Subdivision 40 A—Objects of Division
40 15 Objects of Division
Subdivision 40 B—Core provisions
Guide to Subdivision 40 B
40 20 What this Subdivision is about
Operative provisions
40 25 Deducting amounts for depreciating assets
40 27 Further reduction of deduction for second hand assets in residential property
40 30 What a depreciating asset is
40 35 Jointly held depreciating assets
40 40 Meaning of hold a depreciating asset
40 42 When mining, quarrying or prospecting rights are used
40 45 Assets to which this Division does not apply
40 50 Assets for which you deduct under another Subdivision
40 53 Alterations etc. to certain depreciating assets
40 55 Use of the “cents per kilometre” car expense deduction method
40 60 When a depreciating asset starts to decline in value
40 65 Choice of methods to work out the decline in value
40 70 Diminishing value method
40 72 Diminishing value method for post 9 May 2006 assets
40 75 Prime cost method
40 80 When you can deduct the asset’s cost
40 82 Assets costing less than $150,000—medium sized businesses—assets first acquired between 2 April 2019 and 31 December 2020
40 85 Meaning of adjustable value and opening adjustable value of a depreciating asset
40 90 Debt forgiveness
40 95 Choice of determining effective life
40 100 Commissioner’s determination of effective life
40 102 Capped life of certain depreciating assets
40 103 Effective life and remaining effective life of certain vessels
40 105 Self assessing effective life
40 110 Recalculating effective life
40 115 Splitting a depreciating asset
40 120 Replacement spectrum licences
40 122 Partial conversions of mining, quarrying or prospecting rights
40 125 Merging depreciating assets
40 130 Choices
40 135 Certain anti avoidance provisions
40 140 Getting tax information from associates
Subdivision 40 C—Cost
Guide to Subdivision 40 C
40 170 What this Subdivision is about
Operative provisions
40 175 Cost
40 180 First element of cost
40 185 Amount you are taken to have paid to hold a depreciating asset or to receive a benefit
40 190 Second element of cost
40 195 Apportionment of cost
40 200 Exclusion from cost
40 205 Cost of a split depreciating asset
40 210 Cost of merged depreciating assets
40 215 Adjustment: double deduction
40 217 Cost of partial continuations of mining, quarrying or prospecting rights
40 220 Cost reduced by amounts not of a capital nature
40 222 Cost reduced by water infrastructure improvement expenditure
40 225 Adjustment: acquiring a car at a discount
40 230 Adjustment: car limit
40 235 Adjustment: National Disability Insurance Scheme costs
Subdivision 40 D—Balancing adjustments
Guide to Subdivision 40 D
40 280 What this Subdivision is about
Operative provisions
40 285 Balancing adjustments
40 290 Reduction for non taxable use
40 291 Reduction for second hand assets used in residential property
40 292 Adjustments—assets used for both general tax purposes and R&D activities
40 293 Adjustments—partnership assets used for both general tax purposes and R&D activities
40 295 Meaning of balancing adjustment event
40 300 Meaning of termination value
40 305 Amount you are taken to have received under a balancing adjustment event
40 310 Apportionment of termination value
40 320 Car to which section 40 225 applies
40 325 Adjustment: car limit
40 335 Deduction for in house software where you will never use it
40 340 Roll over relief
40 345 What the roll over relief is
40 350 Additional consequences
40 360 Notice to allow transferee to work out how this Division applies
40 362 Roll over relief for holders of vessels covered by certificates under the Shipping Reform (Tax Incentives) Act 2012
40 363 Roll over relief for interest realignment arrangements
40 364 Interest realignment adjustments
40 365 Involuntary disposals
40 370 Balancing adjustments where there has been use of different car expense methods
Subdivision 40 E—Low value and software development pools
Guide to Subdivision 40 E
40 420 What this Subdivision is about
Operative provisions
40 425 Allocating assets to a low value pool
40 430 Rules for assets in low value pools
40 435 Private or exempt use of assets
40 440 How you work out the decline in value of assets in low value pools
40 445 Balancing adjustment events
40 450 Software development pools
40 455 How to work out your deduction
40 460 Your assessable income includes consideration for pooled software
Subdivision 40 F—Primary production depreciating assets
Guide to Subdivision 40 F
40 510 What this Subdivision is about
Operative provisions
40 515 Water facilities, horticultural plants, fodder storage assets and fencing assets
40 520 Meaning of water facility, horticultural plant, fodder storage asset and fencing asset
40 525 Conditions
40 530 When declines in value start
40 535 Meaning of horticulture and commercial horticulture
40 540 How you work out the decline in value for water facilities
40 545 How you work out the decline in value for horticultural plants
40 548 How you work out the decline in value for fodder storage assets
40 551 How you work out the decline in value for fencing assets
40 555 Amounts you cannot deduct
40 560 Non arm’s length transactions
40 565 Extra deduction for destruction of a horticultural plant
40 570 How this Subdivision applies to partners and partnerships
40 575 Getting tax information if you acquire a horticultural plant
Subdivision 40 G—Capital expenditure of primary producers and other landholders
Guide to Subdivision 40 G
40 625 What this Subdivision is about
Operative provisions
40 630 Landcare operations
40 635 Meaning of landcare operation
40 640 Meaning of approved management plan
40 645 Electricity and telephone lines
40 650 Amounts you cannot deduct under this Subdivision
40 655 Meaning of connecting power to land or upgrading the connection and metering point
40 660 Non arm’s length transactions
40 665 How this Subdivision applies to partners and partnerships
40 670 Approval of persons as farm consultants
40 675 Review of decisions relating to approvals
Subdivision 40 H—Capital expenditure that is immediately deductible
Guide to Subdivision 40 H
40 725 What this Subdivision is about
Operative provisions
40 730 Deduction for expenditure on exploration or prospecting
40 735 Deduction for expenditure on mining site rehabilitation
40 740 Meaning of ancillary mining activities and mining building site
40 745 No deduction for certain expenditure
40 750 Deduction for payments of petroleum resource rent tax
40 755 Environmental protection activities
40 760 Limits on deductions from environmental protection activities
40 765 Non arm’s length transactions
Subdivision 40 I—Capital expenditure that is deductible over time
Guide to Subdivision 40 I
40 825 What this Subdivision is about
Operative provisions
40 830 Project pools
40 832 Project pools for post 9 May 2006 projects
40 835 Reduction of deduction
40 840 Meaning of project amount
40 845 Project life
40 855 When you start to deduct amounts for a project pool
40 860 Meaning of mining capital expenditure
40 865 Meaning of transport capital expenditure
40 870 Meaning of transport facility
40 875 Meaning of processed minerals and minerals treatment
40 880 Business related costs
40 885 Non arm’s length transactions
Subdivision 40 J—Capital expenditure for the establishment of trees in carbon sink forests
Guide to Subdivision 40 J
40 1000 What this Subdivision is about
Operative provisions
40 1005 Deduction for expenditure for establishing trees in carbon sink forests
40 1010 Expenditure for establishing trees in carbon sink forests
40 1015 Carbon sequestration by trees
40 1020 Certain expenditure disregarded
40 1025 Non arm’s length transactions
40 1030 Extra deduction for destruction of trees in carbon sink forest
40 1035 Getting information if you acquire a carbon sink forest
Subdivision 40 K—Farm in farm out arrangements
Guide to Subdivision 40 K
40 1095 What this Subdivision is about
Farm in farm out arrangements and exploration benefits
40 1100 Meaning of farm in farm out arrangement and exploration benefit
Consequences for transferors
40 1105 Treatment of certain exploration benefits received under farm in farm out arrangements
40 1110 Cost of split interests resulting from farm in farm out arrangements
40 1115 Deductions relating to receipt of exploration benefits
40 1120 Cost base and reduced cost base of exploration benefits etc.
40 1125 Effect of exploration benefits on the cost of mining, quarrying or prospecting information
Consequences for transferees
40 1130 Consequences of certain exploration benefits provided under farm in farm out arrangements
Division 41—Additional deduction for certain new business investment
Guide to Division 41
41 1 What this Division is about
Operative provisions
41 5 Object of Division
41 10 Entitlement to deduction for investment
41 15 Amount of deduction
41 20 Recognised new investment amount
41 25 Investment commitment time
41 30 First use time
41 35 New investment threshold
Division 43—Deductions for capital works
Guide to Division 43
43 1 What this Division is about
43 2 Key concepts used in this Division
Subdivision 43 A—Key operative provisions
Guide to Subdivision 43 A
43 5 What this Subdivision is about
Operative provisions
43 10 Deductions for capital works
43 15 Amount you can deduct
43 20 Capital works to which this Division applies
43 25 Rate of deduction
43 30 No deduction until construction is complete
43 35 Requirement for registration under the Industry Research and Development Act
43 40 Deduction for destruction of capital works
43 45 Certain anti avoidance provisions
43 50 Links and signposts to other parts of the Act
43 55 Anti avoidance—arrangement etc. with tax exempt entity
Subdivision 43 B—Establishing the deduction base
Guide to Subdivision 43 B
43 60 What this Subdivision is about
43 65 Explanatory material
Operative provisions
43 70 What is construction expenditure?
43 72 Meaning of forestry road, timber operation and timber mill building
43 75 Construction expenditure area
43 80 When capital works begin
43 85 Pools of construction expenditure
43 90 Table of intended use at time of completion of construction
43 95 Meaning of hotel building and apartment building
43 100 Certificates by Industry Innovation and Science Australia
Subdivision 43 C—Your area and your construction expenditure
Guide to Subdivision 43 C
43 105 What this Subdivision is about
43 110 Explanatory material
Operative provisions
43 115 Your area and your construction expenditure—owners
43 120 Your area and your construction expenditure—lessees and quasi ownership right holders
43 125 Lessees’ or right holders’ pools can revert to owner
43 130 Identifying your area on acquisition or disposal
Subdivision 43 D—Deductible uses of capital works
Guide to Subdivision 43 D
43 135 What this Subdivision is about
Operative provisions
43 140 Using your area in a deductible way
43 145 Using your area in the 4% manner
43 150 Meaning of industrial activities
Subdivision 43 E—Special rules about uses
Guide to Subdivision 43 E
43 155 What this Subdivision is about
Operative provisions
43 160 Your area is used for a purpose if it is maintained ready for use for the purpose
43 165 Temporary cessation of use
43 170 Own use—capital works other than hotel and apartment buildings
43 175 Own use—hotel and apartment buildings
43 180 Special rules for hotel and apartment buildings
43 185 Residential or display use
43 190 Use of facilities not commonly provided, and of certain buildings used to operate a hotel, motel or guest house
43 195 Use for R&D activities must be in connection with a business
Subdivision 43 F—Calculation of deduction
Guide to Subdivision 43 F
43 200 What this Subdivision is about
43 205 Explanatory material
Operative provisions
43 210 Deduction for capital works begun after 26 February 1992
43 215 Deduction for capital works begun before 27 February 1992
43 220 Capital works taken to have begun earlier for certain purposes
Subdivision 43 G—Undeducted construction expenditure
Guide to Subdivision 43 G
43 225 What this Subdivision is about
Operative provisions
43 230 Calculating undeducted construction expenditure—common step
43 235 Post 26 February 1992 undeducted construction expenditure
43 240 Pre 27 February 1992 undeducted construction expenditure
Subdivision 43 H—Balancing deduction on destruction of capital works
Guide to Subdivision 43 H
43 245 What this Subdivision is about
Operative provisions
43 250 The amount of the balancing deduction
43 255 Amounts received or receivable
43 260 Apportioning amounts received for destruction
Division 45—Disposal of leases and leased plant
Guide to Division 45
45 1 What this Division is about
Operative provisions
45 5 Disposal of leased plant or lease
45 10 Disposal of interest in partnership
45 15 Disposal of shares in 100% subsidiary that leases plant
45 20 Disposal of shares in 100% subsidiary that leases plant in partnership
45 25 Group members liable to pay outstanding tax
45 30 Reduction for certain plant acquired before 21.9.99
45 35 Limit on amount included for plant for which there is a CGT exemption
45 40 Meaning of plant and written down value
Part 2 15—Non assessable income
Division 50—Exempt entities
Subdivision 50 A—Various exempt entities
50 1 Entities whose ordinary income and statutory income is exempt
50 5 Charity, education and science
50 10 Community service
50 15 Employees and employers
50 25 Government
50 30 Health
50 35 Mining
50 40 Primary and secondary resources, and tourism
50 45 Sports, culture and recreation
50 47 Special condition for all items
50 50 Special conditions for item 1.1
50 52 Special condition for item 1.1
50 55 Special conditions for items 1.3, 1.4, 6.1 and 6.2
50 65 Special conditions for item 1.6
50 70 Special conditions for items 1.7, 2.1, 9.1 and 9.2
50 72 Special condition for item 4.1
50 75 Certain distributions may be made overseas
Subdivision 50 B—Endorsing charitable entities as exempt from income tax
Guide to Subdivision 50 B
50 100 What this Subdivision is about
Endorsing charitable entities as exempt from income tax
50 105 Endorsement by Commissioner
50 110 Entitlement to endorsement
Division 51—Exempt amounts
51 1 Amounts of ordinary income and statutory income that are exempt
51 5 Defence
51 10 Education and training
51 30 Welfare
51 32 Compensation payments for loss of tax exempt payments
51 33 Compensation payments for loss of pay and/or allowances as a Defence reservist
51 35 Payments to a full time student at a school, college or university
51 40 Payments to a secondary student
51 42 Bonuses for early completion of an apprenticeship
51 43 Income collected or derived by copyright collecting society
51 45 Income collected or derived by resale royalty collecting society
51 50 Maintenance payments to a spouse or child
51 52 Income derived from eligible venture capital investments by ESVCLPs
51 54 Gain or profit from disposal of eligible venture capital investments
51 55 Gain or profit from disposal of venture capital equity
51 57 Interest on judgment debt relating to personal injury
51 60 Prime Minister’s Prizes
51 100 Shipping
51 105 Shipping activities
51 110 Core shipping activities
51 115 Incidental shipping activities
51 120 Interest on unclaimed money and property
51 125 2018 storms—relief payments
Division 52—Certain pensions, benefits and allowances are exempt from income tax
Guide to Division 52
52 1 What this Division is about
Subdivision 52 A—Exempt payments under the Social Security Act 1991
Guide to Subdivision 52 A
52 5 What this Subdivision is about
Operative provisions
52 10 How much of a social security payment is exempt?
52 15 Supplementary amounts of payments
52 20 Tax free amount of an ordinary payment after the death of your partner
52 25 Tax free amount of certain bereavement lump sum payments
52 30 Tax free amount of certain other bereavement lump sum payments
52 35 Tax free amount of a lump sum payment made because of the death of a person you are caring for
52 40 Provisions of the Social Security Act 1991 under which payments are made
Subdivision 52 B—Exempt payments under the Veterans’ Entitlements Act 1986
Guide to Subdivision 52 B
52 60 What this Subdivision is about
Operative provisions
52 65 How much of a veterans’ affairs payment is exempt?
52 70 Supplementary amounts of payments
52 75 Provisions of the Veterans’ Entitlements Act 1986 under which payments are made
Subdivision 52 C—Exempt payments made because of the Veterans’ Entitlements (Transitional Provisions and Consequential Amendments) Act 1986
Guide to Subdivision 52 C
52 100 What this Subdivision is about
Operative provisions
52 105 Supplementary amount of a payment made under the Repatriation Act 1920 is exempt
52 110 Other exempt payments
Subdivision 52 CA—Exempt payments under the Military Rehabilitation and Compensation Act 2004
Guide to Subdivision 52 CA
52 112 What this Subdivision is about
Operative provisions
52 114 How much of a payment under the Military Rehabilitation and Compensation Act is exempt?
Subdivision 52 CB—Exempt payments under the Australian Participants in British Nuclear Tests and British Commonwealth Occupation Force (Treatment) Act 2006
52 117 Payments of travelling expenses and pharmaceutical supplement are exempt
Subdivision 52 CC—Exempt payments under the Treatment Benefits (Special Access) Act 2019
52 120 Payments of travelling expenses and pharmaceutical supplement are exempt
Subdivision 52 E—Exempt payments under the ABSTUDY scheme
Guide to Subdivision 52 E
52 130 What this Subdivision is about
Operative provisions
52 131 Payments under ABSTUDY scheme
52 132 Supplementary amount of payment
52 133 Tax free amount of ordinary payment on death of partner if no bereavement payment payable
52 134 Tax free amount if you receive a bereavement lump sum payment
Subdivision 52 F—Exemption of Commonwealth education or training payments
52 140 Supplementary amount of a Commonwealth education or training payment is exempt
52 145 Meaning of Commonwealth education or training payment
Subdivision 52 G—Exempt payments under the A New Tax System (Family Assistance) (Administration) Act 1999
52 150 Family assistance payments are exempt
Subdivision 52 H—Other exempt payments
52 160 Economic security strategy payments are exempt
52 162 ETR payments are exempt
52 165 Household stimulus payments are exempt
52 170 Outer Regional and Remote payments under the Helping Children with Autism package are exempt
52 172 Outer Regional and Remote payments under the Better Start for Children with Disability initiative are exempt
52 175 Continence aids payments are exempt
52 180 National Disability Insurance Scheme amounts are exempt
52 185 Acute support packages are exempt
Division 53—Various exempt payments
Guide to Division 53
53 1 What this Division is about
Operative provisions
53 10 Exemption of various types of payments
53 20 Exemption of similar Australian and United Kingdom veterans’ payments
53 25 Coronavirus economic response payment
53 30 Territories Stolen Generations Redress Scheme payments are exempt
Division 54—Exemption for certain payments made under structured settlements and structured orders
Guide to Division 54
54 1 What this Division is about
Subdivision 54 A—Definitions
Operative provisions
54 5 Definitions
54 10 Meaning of structured settlement and structured order
Subdivision 54 B—Tax exemption for personal injury annuities
Operative provisions
54 15 Personal injury annuity exemption for injured person
54 20 Lump sum compensation etc. would not have been assessable
54 25 Requirements of the annuity instrument
54 30 Requirements for payments of the annuity
54 35 Payments during the guarantee period on the death of the injured person
54 40 Requirement for minimum monthly level of support
Subdivision 54 C—Tax exemption for personal injury lump sums
Operative provisions
54 45 Personal injury lump sum exemption for injured person
54 50 Lump sum compensation would not have been assessable
54 55 Requirements of the instrument under which the lump sum is paid
54 60 Requirements for payments of the lump sum
Subdivision 54 D—Miscellaneous
Operative provisions
54 65 Exemption for certain payments to reversionary beneficiaries
54 70 Special provisions about trusts
54 75 Minister to arrange for review and report
Division 55—Payments that are not exempt from income tax
Guide to Division 55
55 1 What this Division is about
Operative provisions
55 5 Occupational superannuation payments
55 10 Education entry payments
Division 58—Capital allowances for depreciating assets previously owned by an exempt entity
Guide to Division 58
58 1 What this Division is about
Subdivision 58 A—Application
58 5 Application of Division
58 10 When an asset is acquired in connection with the acquisition of a business
Subdivision 58 B—Calculating decline in value of privatised assets under Division 40
58 60 Purpose of rules in this Subdivision
58 65 Choice of method to work out cost of privatised asset
58 70 Application of Division 40
58 75 Meaning of notional written down value
58 80 Meaning of undeducted pre existing audited book value
58 85 Pre existing audited book value of depreciating asset
58 90 Method and effective life for transition entity
Division 59—Particular amounts of non assessable non exempt income
Guide to Division 59
59 1 What this Division is about
Operative provisions
59 10 Compensation under firearms surrender arrangements
59 15 Mining payments
59 20 Taxable amounts relating to franchise fees windfall tax
59 25 Taxable amounts relating to Commonwealth places windfall tax
59 30 Amounts you must repay
59 35 Amounts that would be mutual receipts but for prohibition on distributions to members or issue of MCIs
59 40 Issue of rights
59 50 Native title benefits
59 55 2019 20 bushfires—payments for volunteer work with fire services
59 60 2019 20 bushfires—disaster relief payments and non cash benefits
59 65 Water infrastructure improvement payments
59 67 Meaning of SRWUIP program, SRWUIP payment, direct SRWUIP payment and indirect SRWUIP payment
59 70 List of SRWUIP programs
59 75 Commissioner to be kept informed
59 80 Amending assessments
59 85 2019 floods—recovery grants for small businesses, primary producers and non profit organisations
59 86 2019 floods—on farm grant program for primary producers
59 90 Cash flow boost
59 95 Coronavirus economic response payment
59 96 COVID 19 disaster payment
59 97 State and Territory grants to small business relating to the recovery from the coronavirus known as COVID 19
59 98 Commonwealth small business support payments relating to the coronavirus known as COVID 19
59 99 2021 floods and storms—recovery grants
59 100 Refund of large scale generation shortfall charge
59 105 Cyclone Seroja—recovery grants
Part 2 20—Tax offsets
Division 61—Generally applicable tax offsets
Subdivision 61 A—Dependant (invalid and carer) tax offset
Guide to Subdivision 61 A
61 1 What this Subdivision is about
Object of this Subdivision
61 5 Object of this Subdivision
Entitlement to the dependant (invalid and carer) tax offset
61 10 Who is entitled to the tax offset
61 15 Cases involving more than one spouse
61 20 Exceeding the income limit for family tax benefit (Part B)
61 25 Eligibility for family tax benefit (Part B) without shared care
Amount of the dependant (invalid and carer) tax offset
61 30 Amount of the dependant (invalid and carer) tax offset
61 35 Families with shared care percentages
61 40 Reduced amounts of dependant (invalid and carer) tax offset
61 45 Reductions to take account of the other individual’s income
Subdivision 61 D—Low Income tax offset
Guide to Subdivision 61 D
61 100 What this Subdivision is about
Operative provisions
61 110 Entitlement to the Low Income tax offset
61 115 Amount of the Low Income tax offset
Subdivision 61 G—Private health insurance offset complementary to Part 2 2 of the Private Health Insurance Act 2007
Guide to Subdivision 61 G
61 200 What this Subdivision is about
Operative provisions
61 205 Entitlement to the private health insurance tax offset
61 210 Amount of the private health insurance tax offset
61 215 Reallocation of the private health insurance tax offset between spouses
Subdivision 61 L—Tax offset for Medicare levy surcharge (lump sum payments in arrears)
Guide to Subdivision 61 L
61 575 What this Subdivision is about
Operative provisions
61 580 Entitlement to a tax offset
61 585 The amount of a tax offset
61 590 Definition of MLS lump sums
Subdivision 61 N—Seafarer tax offset
Guide to Subdivision 61 N
61 695 What this Subdivision is about
Operative provisions
61 700 Object of this Subdivision
61 705 Who is entitled to the seafarer tax offset
61 710 Amount of the seafarer tax offset
Subdivision 61 P—ESVCLP tax offset
Guide to Subdivision 61 P
61 750 What this Subdivision is about
Operative provisions
61 755 Object of this Subdivision
61 760 Who is entitled to the ESVCLP tax offset
61 765 Amount of the ESVCLP tax offset—general case
61 770 Amount of the ESVCLP tax offset—members of trusts or partnerships
61 775 Amount of the ESVCLP tax offset—trustees
Division 63—Common rules for tax offsets
Guide to Division 63
63 1 What this Division is about
63 10 Priority rules
Division 65—Tax offset carry forward rules
Guide to Division 65
65 10 What this Division is about
Operative provisions
65 30 Amount carried forward
65 35 How to apply carried forward tax offsets
65 40 When a company cannot apply a tax offset
65 50 Effect of bankruptcy
65 55 Deduction for amounts paid for debts incurred before bankruptcy
Division 67—Refundable tax offset rules
Guide to Division 67
67 10 What this Division is about
Operative provisions
67 20 Which tax offsets this Division applies to
67 23 Refundable tax offsets
67 25 Refundable tax offsets—franked distributions
67 30 Refundable tax offsets—R&D
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Volume 3
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Chapter 2—Liability rules of general application
Part 2 25—Trading stock
Division 70—Trading stock
Guide to Division 70
70 1 What this Division is about
70 5 The 3 key features of tax accounting for trading stock
Subdivision 70 A—What is trading stock
70 10 Meaning of trading stock
70 12 Registered emissions units
Subdivision 70 B—Acquiring trading stock
70 15 In which income year do you deduct an outgoing for trading stock?
70 20 Non arm’s length transactions
70 25 Cost of trading stock is not a capital outgoing
70 30 Starting to hold as trading stock an item you already own
Subdivision 70 C—Accounting for trading stock you hold at the start or end of the income year
General rules
70 35 You include the value of your trading stock in working out your assessable income and deductions
70 40 Value of trading stock at start of income year
70 45 Value of trading stock at end of income year
Special valuation rules
70 50 Valuation if trading stock obsolete etc.
70 55 Working out the cost of natural increase of live stock
70 60 Valuation of horse breeding stock
70 65 Working out the horse opening value and the horse reduction amount
Subdivision 70 D—Assessable income arising from disposals of trading stock and certain other assets
Guide to Subdivision 70 D
70 75 What this Subdivision is about
70 80 Why the rules in this Subdivision are necessary
Operative provisions
70 85 Application of this Subdivision to certain other assets
70 90 Assessable income on disposal of trading stock outside the ordinary course of business
70 95 Purchase price is taken to be market value
70 100 Notional disposal when you stop holding an item as trading stock
70 105 Death of owner
70 110 You stop holding an item as trading stock but still own it
70 115 Compensation for lost trading stock
Subdivision 70 E—Miscellaneous
70 120 Deducting capital costs of acquiring trees
Part 2 40—Rules affecting employees and other taxpayers receiving PAYG withholding payments
Division 80—General rules
Guide to Division 80
80 1 What this Division is about
Operative provisions
80 5 Holding of an office
80 10 Application to the termination of employment
80 15 Transfer of property
80 20 Payments for your benefit or at your direction or request
Division 82—Employment termination payments
Guide to Division 82
82 1 What this Division is about
Subdivision 82 A—Employment termination payments: life benefits
Guide to Subdivision 82 A
82 5 What this Subdivision is about
Operative provisions
82 10 Taxation of life benefit termination payments
Subdivision 82 B—Employment termination payments: death benefits
Guide to Subdivision 82 B
82 60 What this Subdivision is about
Operative provisions
82 65 Death benefits for dependants
82 70 Death benefits for non dependants
82 75 Death benefits paid to trustee of deceased estate
Subdivision 82 C—Key concepts
Guide to Subdivision 82 C
82 125 What this Subdivision is about
Operative provisions
82 130 What is an employment termination payment?
82 135 Payments that are not employment termination payments
82 140 Tax free component of an employment termination payment
82 145 Taxable component of an employment termination payment
82 150 What is an invalidity segment of an employment termination payment?
82 155 What is a pre July 83 segment of an employment termination payment?
82 160 What is the ETP cap amount?
Division 83—Other payments on termination of employment
Guide to Division 83
83 1 What this Division is about
Subdivision 83 A—Unused annual leave payments
Guide to Subdivision 83 A
83 5 What this Subdivision is about
Operative provisions
83 10 Unused annual leave payment is assessable
83 15 Entitlement to tax offset
Subdivision 83 B—Unused long service leave payments
Guide to Subdivision 83 B
83 65 What this Subdivision is about
General
83 70 Application—long service leave
83 75 Meaning of unused long service leave payment
83 80 Taxation of unused long service leave payments
83 85 Entitlement to tax offset
83 90 Meaning of pre 16/8/78 period, pre 18/8/93 period, post 17/8/93 period and long service leave employment period
Employment wholly full time or wholly part time
83 95 How to work out amount of payment attributable to each period
83 100 How to work out unused days of long service leave for each period
83 105 How to work out long service leave accrued in each period
Employment partly full time and partly part time
83 110 Leave accrued in pre 16/8/78, pre 18/8/93 and post 17/8/93 periods—employment full time and part time
Long service leave taken at less than full pay
83 115 Working out used days of long service leave if leave taken at less than full pay
Subdivision 83 C—Genuine redundancy payments and early retirement scheme payments
Guide to Subdivision 83 C
83 165 What this Subdivision is about
Operative provisions
83 170 Tax free treatment of genuine redundancy payments and early retirement scheme payments
83 175 What is a genuine redundancy payment?
83 180 What is an early retirement scheme payment?
Subdivision 83 D—Foreign termination payments
Guide to Subdivision 83 D
83 230 What this Subdivision is about
Operative provisions
83 235 Termination payments tax free—foreign resident period
83 240 Termination payments tax free—Australian resident period
Subdivision 83 E—Other payments
Guide to Subdivision 83 E
83 290 What this Subdivision is about
Operative provisions
83 295 Termination payments made more than 12 months after termination etc.
Division 83A—Employee share schemes
Guide to Division 83A
83A 1 What this Division is about
Subdivision 83A A—Objects of Division and key concepts
83A 5 Objects of Division
83A 10 Meaning of ESS interest and employee share scheme
Subdivision 83A B—Immediate inclusion of discount in assessable income
Guide to Subdivision 83A B
83A 15 What this Subdivision is about
Operative provisions
83A 20 Application of Subdivision
83A 25 Discount to be included in assessable income
83A 30 Amount for which discounted ESS interest acquired
83A 33 Reducing amounts included in assessable income—start ups
83A 35 Reducing amounts included in assessable income—other cases
83A 45 Further conditions for reducing amounts included in assessable income
Subdivision 83A C—Deferred inclusion of gain in assessable income
Guide to Subdivision 83A C
83A 100 What this Subdivision is about
Main provisions
83A 105 Application of Subdivision
83A 110 Amount to be included in assessable income
83A 115 ESS deferred taxing point—shares
83A 120 ESS deferred taxing point—rights to acquire shares
83A 125 Tax treatment of ESS interests held after ESS deferred taxing points
Takeovers and restructures
83A 130 Takeovers and restructures
Subdivision 83A D—Deduction for employer
Guide to Subdivision 83A D
83A 200 What this Subdivision is about
Operative provisions
83A 205 Deduction for employer
83A 210 Timing of general deductions
Subdivision 83A E—Miscellaneous
83A 305 Acquisition by associates
83A 310 Forfeiture etc. of ESS interest
83A 315 Market value of ESS interest
83A 320 Interests in a trust
83A 325 Application of Division to relationships similar to employment
83A 330 Application of Division to ceasing employment
83A 335 Application of Division to stapled securities
83A 340 Application of Division to indeterminate rights
Part 2 42—Personal services income
Division 84—Introduction
Guide to Part 2 42
84 1 What this Part is about
Operative provisions
84 5 Meaning of personal services income
84 10 This Part does not imply that individuals are employees
Division 85—Deductions relating to personal services income
Guide to Division 85
85 1 What this Division is about
Operative provisions
85 5 Object of this Division
85 10 Deductions for non employees relating to personal services income
85 15 Deductions for rent, mortgage interest, rates and land tax
85 20 Deductions for payments to associates etc.
85 25 Deductions for superannuation for associates
85 30 Exception: personal services businesses
85 35 Exception: employees, office holders and religious practitioners
85 40 Application of Subdivision 900 B to individuals who are not employees
Division 86—Alienation of personal services income
Guide to Division 86
86 1 What this Division is about
86 5 A simple description of what this Division does
Subdivision 86 A—General
86 10 Object of this Division
86 15 Effect of obtaining personal services income through a personal services entity
86 20 Offsetting the personal services entity’s deductions against personal services income
86 25 Apportionment of entity maintenance deductions among several individuals
86 27 Deduction for net personal services income loss
86 30 Assessable income etc. of the personal services entity
86 35 Later payments of, or entitlements to, personal services income to be disregarded for income tax purposes
86 40 Salary payments shortly after an income year
Subdivision 86 B—Entitlement to deductions
86 60 General rule for deduction entitlements of personal services entities
86 65 Entity maintenance deductions
86 70 Car expenses
86 75 Superannuation
86 80 Salary or wages promptly paid
86 85 Deduction entitlements of personal services entities for amounts included in an individual’s assessable income
86 87 Personal services entity cannot deduct net personal services income loss
86 90 Application of Divisions 28 and 900 to personal services entities
Division 87—Personal services businesses
Guide to Division 87
87 1 What this Division is about
87 5 Diagram showing the operation of this Division
Subdivision 87 A—General
87 10 Object of this Division
87 15 What is a personal services business?
87 18 The results test for a personal services business
87 20 The unrelated clients test for a personal services business
87 25 The employment test for a personal services business
87 30 The business premises test for a personal services business
87 35 Personal services income from Australian government agencies
87 40 Application of this Division to certain agents
Subdivision 87 B—Personal services business determinations
87 60 Personal services business determinations for individuals
87 65 Personal services business determinations for personal services entities
87 70 Applying etc. for personal services business determinations
87 75 When personal services business determinations have effect
87 80 Revoking personal services business determinations
87 85 Review of decisions
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Chapter 3—Specialist liability rules
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Part 3 1—Capital gains and losses: general topics
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Division 100—A Guide to capital gains and losses
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General overview
100 1 What this Division is about
100 5 Effect of this Division
100 10 Fundamentals of CGT
100 15 Overview of Steps 1 and 2
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Step 1—Have you made a capital gain or a capital loss?
100 20 What events attract CGT?
100 25 What are CGT assets?
100 30 Does an exception or exemption apply?
100 33 Can there be a roll over?
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Step 2—Work out the amount of the capital gain or loss
100 35 What is a capital gain or loss?
100 40 What factors come into calculating a capital gain or loss?
100 45 How to calculate the capital gain or loss for most CGT events
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Step 3—Work out your net capital gain or loss for the income year
100 50 How to work out your net capital gain or loss
100 55 How do you comply with CGT?
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Keeping records for CGT purposes
100 60 Why keep records?
100 65 What records?
100 70 How long you need to keep records
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Division 102—Assessable income includes net capital gain
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Guide to Division 102
102 1 What this Division is about
102 3 Concessions in working out your net capital gain
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Operative provisions
102 5 Assessable income includes net capital gain
102 10 How to work out your net capital loss
102 15 How to apply net capital losses
102 20 Ways you can make a capital gain or a capital loss
102 22 Amounts of capital gains and losses
102 23 CGT event still happens even if gain or loss disregarded
102 25 Order of application of CGT events
102 30 Exceptions and modifications
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Division 103—General rules
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Guide to Division 103
103 1 What this Division is about
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Operative provisions
103 5 Giving property as part of a transaction
103 10 Entitlement to receive money or property
103 15 Requirement to pay money or give property
103 25 Choices
103 30 Reduction of cost base etc. by net input tax credits
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Division 104—CGT events
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Guide to Division 104
104 1 What this Division is about
104 5 Summary of the CGT events
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Subdivision 104 A—Disposals
104 10 Disposal of a CGT asset: CGT event A1
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Subdivision 104 B—Use and enjoyment before title passes
104 15 Use and enjoyment before title passes: CGT event B1
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Subdivision 104 C—End of a CGT asset
104 20 Loss or destruction of a CGT asset: CGT event C1
104 25 Cancellation, surrender and similar endings: CGT event C2
104 30 End of option to acquire shares etc.: CGT event C3
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Subdivision 104 D—Bringing into existence a CGT asset
104 35 Creating contractual or other rights: CGT event D1
104 40 Granting an option: CGT event D2
104 45 Granting a right to income from mining: CGT event D3
104 47 Conservation covenants: CGT event D4
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Subdivision 104 E—Trusts
104 55 Creating a trust over a CGT asset: CGT event E1
104 60 Transferring a CGT asset to a trust: CGT event E2
104 65 Converting a trust to a unit trust: CGT event E3
104 70 Capital payment for trust interest: CGT event E4
104 71 Adjustment of non assessable part
104 72 Reducing your capital gain under CGT event E4 if you are a trustee
104 75 Beneficiary becoming entitled to a trust asset: CGT event E5
104 80 Disposal to beneficiary to end income right: CGT event E6
104 85 Disposal to beneficiary to end capital interest: CGT event E7
104 90 Disposal by beneficiary of capital interest: CGT event E8
104 95 Making a capital gain
104 100 Making a capital loss
104 105 Creating a trust over future property: CGT event E9
104 107A AMIT—cost base reduction exceeds cost base: CGT event E10
104 107B Annual cost base adjustment for member’s unit or interest in AMIT
104 107C AMIT cost base net amount
104 107D AMIT cost base reduction amount
104 107E AMIT cost base increase amount
104 107F Receipt of money etc. increasing AMIT cost base reduction amount not to be treated as income
104 107G Effect of AMIT cost base net amount on cost of AMIT membership interest or unit that is a revenue asset—adjustment of cost of asset
104 107H Effect of AMIT cost base net amount on cost of AMIT membership interest or unit that is a revenue asset—amount included in assessable income
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Subdivision 104 F—Leases
104 110 Granting a lease: CGT event F1
104 115 Granting a long term lease: CGT event F2
104 120 Lessor pays lessee to get lease changed: CGT event F3
104 125 Lessee receives payment for changing lease: CGT event F4
104 130 Lessor receives payment for changing lease: CGT event F5
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Subdivision 104 G—Shares
104 135 Capital payment for shares: CGT event G1
104 145 Liquidator or administrator declares shares or financial instruments worthless: CGT event G3
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Subdivision 104 H—Special capital receipts
104 150 Forfeiture of deposit: CGT event H1
104 155 Receipt for event relating to a CGT asset: CGT event H2
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Subdivision 104 I—Australian residency ends
104 160 Individual or company stops being an Australian resident: CGT event I1
104 165 Exception for individuals
104 170 Trust stops being a resident trust: CGT event I2
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Subdivision 104 J—CGT events relating to roll overs
104 175 Company ceasing to be member of wholly owned group after roll over: CGT event J1
104 180 Sub group break up
104 182 Consolidated group break up
104 185 Change in relation to replacement asset or improved asset after a roll over under Subdivision 152 E: CGT event J2
104 190 Replacement asset period
104 195 Trust failing to cease to exist after roll over under Subdivision 124 N: CGT event J4
104 197 Failure to acquire replacement asset and to incur fourth element expenditure after a roll over under Subdivision 152 E: CGT event J5
104 198 Cost of acquisition of replacement asset or amount of fourth element expenditure, or both, not sufficient to cover disregarded capital gain: CGT event J6
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Subdivision 104 K—Other CGT events
104 205 Incoming international transfer of emissions unit: CGT event K1
104 210 Bankrupt pays amount in relation to debt: CGT event K2
104 215 Asset passing to tax advantaged entity: CGT event K3
104 220 CGT asset starts being trading stock: CGT event K4
104 225 Special collectable losses: CGT event K5
104 230 Pre CGT shares or trust interest: CGT event K6
104 235 Balancing adjustment events for depreciating assets and certain assets used for R&D: CGT event K7
104 240 Working out capital gain or loss for CGT event K7: general case
104 245 Working out capital gain or loss for CGT event K7: pooled assets
104 250 Direct value shifts: CGT event K8
104 255 Carried interests: CGT event K9
104 260 Certain short term forex realisation gains: CGT event K10
104 265 Certain short term forex realisation losses: CGT event K11
104 270 Foreign hybrids: CGT event K12
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Subdivision 104 L—Consolidated groups and MEC groups
104 500 Loss of pre CGT status of membership interests in entity becoming subsidiary member: CGT event L1
104 505 Where pre formation intra group roll over reduction results in negative allocable cost amount: CGT event L2
104 510 Where tax cost setting amounts for retained cost base assets exceeds joining allocable cost amount: CGT event L3
104 515 Where no reset cost base assets and excess of net allocable cost amount on joining: CGT event L4
104 520 Where amount remaining after step 4 of leaving allocable cost amount is negative: CGT event L5
104 525 Error in calculation of tax cost setting amount for joining entity’s assets: CGT event L6
104 535 Where reduction in tax cost setting amounts for reset cost base assets cannot be allocated: CGT event L8
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Division 106—Entity making the gain or loss
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Guide to Division 106
106 1 What this Division is about
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Subdivision 106 A—Partnerships
106 5 Partnerships
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Subdivision 106 B—Bankruptcy and liquidation
106 30 Effect of bankruptcy
106 35 Effect of liquidation
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Subdivision 106 C—Absolutely entitled beneficiaries
106 50 Absolutely entitled beneficiaries
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Subdivision 106 D—Securities, charges and encumbrances
106 60 Securities, charges and encumbrances
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Division 108—CGT assets
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Guide to Division 108
108 1 What this Division is about
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Subdivision 108 A—What a CGT asset is
108 5 CGT assets
108 7 Interest in CGT assets as joint tenants
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Subdivision 108 B—Collectables
108 10 Losses from collectables to be offset only against gains from collectables
108 15 Sets of collectables
108 17 Cost base of a collectable
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Subdivision 108 C—Personal use assets
108 20 Losses from personal use assets must be disregarded
108 25 Sets of personal use assets
108 30 Cost base of a personal use asset
Subdivision 108 D—Separate CGT assets
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Guide to Subdivision 108 D
108 50 What this Subdivision is about
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Operative provisions
108 55 When is a building a separate asset from land?
108 60 Depreciating asset that is part of a building is a separate asset
108 65 Land adjacent to land acquired before 20 September 1985
108 70 When is a capital improvement a separate asset?
108 75 Capital improvements to CGT assets for which a roll over may be available
108 80 Deciding if capital improvements are related to each other
108 85 Meaning of improvement threshold
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Division 109—Acquisition of CGT assets
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Guide to Division 109
109 1 What this Division is about
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Subdivision 109 A—Operative rules
109 5 General acquisition rules
109 10 When you acquire a CGT asset without a CGT event
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Subdivision 109 B—Signposts to other acquisition rules
109 50 Effect of this Subdivision
109 55 Other acquisition rules
109 60 Acquisition rules outside this Part and Part 3 3
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Division 110—Cost base and reduced cost base
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Guide to Division 110
110 1 What this Division is about
110 5 Modifications to general rules
110 10 Rules about cost base not relevant for some CGT events
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Subdivision 110 A—Cost base
110 25 General rules about cost base
110 35 Incidental costs
110 36 Indexation
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What does not form part of the cost base
110 37 Expenditure forming part of cost base or element
110 38 Exclusions
110 40 Assets acquired before 7.30 pm on 13 May 1997
110 43 Partnership interests acquired before 7.30 pm on 13 May 1997
110 45 Assets acquired after 7.30 pm on 13 May 1997
110 50 Partnership interests acquired after 7.30 pm on 13 May 1997
110 53 Exceptions to application of sections 110 45 and 110 50
110 54 Debt deductions disallowed by thin capitalisation rules
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Subdivision 110 B—Reduced cost base
110 55 General rules about reduced cost base
110 60 Reduced cost base for partnership assets
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Division 112—Modifications to cost base and reduced cost base
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Guide to Division 112
112 1 What this Division is about
112 5 Discussion of modifications
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Subdivision 112 A—General modifications
112 15 General rule for replacement modifications
112 20 Market value substitution rule
112 25 Split, changed or merged assets
112 30 Apportionment rules
112 35 Assumption of liability rule
112 36 Acquisitions of assets involving look through earnout rights
112 37 Put options
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Subdivision 112 B—Finding tables for special rules
112 40 Effect of this Subdivision
112 45 CGT events
112 46 Annual cost base adjustment for member’s unit or interest in AMIT
112 48 Gifts acquired by associates
112 50 Main residence
112 53 Scrip for scrip roll over
112 53AA Statutory licences
112 53AB Change of incorporation
112 53A MDO roll over
112 53B Exchange of stapled ownership interests for units in a unit trust
112 53C Water entitlement roll overs
112 54 Demergers
112 54A Transfer of assets between certain trusts
112 55 Effect of you dying
112 60 Bonus shares or units
112 65 Rights
112 70 Convertible interests
112 77 Exchangeable interests
112 78 Exploration investments
112 80 Leases
112 85 Options
112 87 Residency
112 90 An asset stops being a pre CGT asset
112 92 Demutualisation of certain entities
112 95 Transfer of tax losses and net capital losses within wholly owned groups of companies
112 97 Modifications outside this Part and Part 3 3
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Subdivision 112 C—Replacement asset roll overs
112 100 Effect of this Subdivision
112 105 What is a replacement asset roll over?
112 110 How is the cost base of the replacement asset modified?
112 115 Table of replacement asset roll overs
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Subdivision 112 D—Same asset roll overs
112 135 Effect of this Subdivision
112 140 What is a same asset roll over?
112 145 How is the cost base of the asset modified?
112 150 Table of same asset roll overs
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Division 114—Indexation of cost base
114 1 Indexing elements of cost base
114 5 When indexation relevant
114 10 Requirement for 12 months ownership
114 15 Cost base modifications
114 20 When expenditure is incurred for roll overs
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Division 115—Discount capital gains and trusts’ net capital gains
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Guide to Division 115
115 1 What this Division is about
Subdivision 115 A—Discount capital gains
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What is a discount capital gain?
115 5 What is a discount capital gain?
115 10 Who can make a discount capital gain?
115 15 Discount capital gain must be made after 21 September 1999
115 20 Discount capital gain must not have indexed cost base
115 25 Discount capital gain must be on asset acquired at least 12 months before
115 30 Special rules about time of acquisition
115 32 Special rule about time of acquisition for certain replacement asset roll overs
115 34 Further special rule about time of acquisition for certain replacement asset roll overs
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What are not discount capital gains?
115 40 Capital gain resulting from agreement made within a year of acquisition
115 45 Capital gain from equity in an entity with newly acquired assets
115 50 Discount capital gain from equity in certain entities
115 55 Capital gains involving money received from demutualisation of friendly society health or life insurer
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Subdivision 115 B—Discount percentage
115 100 What is the discount percentage for a discount capital gain
115 105 Foreign or temporary residents—individuals with direct gains
115 110 Foreign or temporary residents—individuals with trust gains
115 115 Foreign or temporary residents—percentage for individuals
115 120 Foreign or temporary residents—trusts with certain gains
115 125 Investors disposing of property used for affordable housing
Subdivision 115 C—Rules about trusts with net capital gains
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Guide to Subdivision 115 C
115 200 What this Division is about
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Operative provisions
115 210 When this Subdivision applies
115 215 Assessing presently entitled beneficiaries
115 220 Assessing trustees under section 98 of the Income Tax Assessment Act 1936
115 222 Assessing trustees under section 99 or 99A of the Income Tax Assessment Act 1936
115 225 Attributable gain
115 227 Share of a capital gain
115 228 Specifically entitled to an amount of a capital gain
115 230 Choice for resident trustee to be specifically entitled to capital gain
Subdivision 115 D—Tax relief for shareholders in listed investment companies
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Guide to Subdivision 115 D
115 275 What this Subdivision is about
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Operative provisions
115 280 Deduction for certain dividends
115 285 Meaning of LIC capital gain
115 290 Meaning of listed investment company
115 295 Maintaining records
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Division 116—Capital proceeds
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Guide to Division 116
116 1 What this Division is about
116 5 General rules
116 10 Modifications to general rules
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General rules
116 20 General rules about capital proceeds
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Modifications to general rules
116 25 Table of modifications to the general rules
116 30 Market value substitution rule: modification 1
116 35 Companies and trusts that are not widely held
116 40 Apportionment rule: modification 2
116 45 Non receipt rule: modification 3
116 50 Repaid rule: modification 4
116 55 Assumption of liability rule: modification 5
116 60 Misappropriation rule: modification 6
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Special rules
116 65 Disposal etc. of a CGT asset the subject of an option
116 70 Option requiring both acquisition and disposal etc.
116 75 Special rule for CGT event happening to a lease
116 80 Special rule if CGT asset is shares or an interest in a trust
116 85 Section 47A of 1936 Act applying to rolled over asset
116 95 Company changes residence from an unlisted country
116 100 Gifts of property
116 105 Conservation covenants
116 110 Roll overs for merging superannuation funds
116 115 Farm in farm out arrangements
116 120 Disposals of assets involving look through earnout rights
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Division 118—Exemptions
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Guide to Division 118
118 1 What this Division is about
Subdivision 118 A—General exemptions
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Exempt assets
118 5 Cars, motor cycles and valour decorations
118 10 Collectables and personal use assets
118 12 Assets used to produce exempt income etc.
118 13 Shares in a PDF
118 15 Registered emissions units
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Anti overlap provisions
118 20 Reducing capital gains if amount otherwise assessable
118 21 Carried interests
118 22 Superannuation lump sums and employment termination payments
118 24 Depreciating assets
118 25 Trading stock
118 27 Division 230 financial arrangements and financial arrangements to which Subdivision 250 E applies
118 30 Film copyright
118 35 R&D
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Exempt or loss denying transactions
118 37 Compensation, damages etc.
118 40 Expiry of a lease
118 42 Transfer of stratum units
118 45 Sale of rights to mine
118 55 Foreign currency hedging gains and losses
118 60 Certain gifts
118 65 Later distributions of personal services income
118 70 Transactions by exempt entities
118 75 Marriage or relationship breakdown settlements
118 77 Native title and rights to native title benefits
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Boat capital gains
118 80 Reduction of boat capital gain
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Special disability trusts
118 85 Special disability trusts
Subdivision 118 B—Main residence
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Guide to Subdivision 118 B
118 100 What this Subdivision is about
118 105 Map of this Subdivision
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Basic case and concepts
118 110 Basic case
118 115 Meaning of dwelling
118 120 Extension to adjacent land etc.
118 125 Meaning of ownership period
118 130 Meaning of ownership interest in land or a dwelling
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Rules that may extend the exemption
118 135 Moving into a dwelling
118 140 Changing main residences
118 145 Absences
118 147 Absence from dwelling replacing main residence that was compulsorily acquired, destroyed etc.
118 150 If you build, repair or renovate a dwelling
118 155 Where individual referred to in section 118 150 dies
118 160 Destruction of dwelling and sale of land
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Rules that may limit the exemption
118 165 Separate CGT event for adjacent land or other structures
118 170 Spouse having different main residence
118 175 Dependent child having different main residence
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Roll overs under Subdivision 126 A
118 178 Previous roll over under Subdivision 126 A
118 180 Acquisition of dwelling from company or trust on marriage or relationship breakdown—roll over provision applying
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Partial exemption rules
118 185 Partial exemption where dwelling was your main residence during part only of ownership period
118 190 Use of dwelling for producing assessable income
118 192 Special rule for first use to produce income
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Dwellings acquired from deceased estates
118 195 Dwelling acquired from a deceased estate
118 197 Special rule for surviving joint tenant
118 200 Partial exemption for deceased estate dwellings
118 205 Adjustment if dwelling inherited from deceased individual
118 210 Trustee acquiring dwelling under will
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Special disability trusts
118 215 What the following provisions are about
118 218 Exemption available to trustee—main case
118 220 Exemption available to trustee—after the principal beneficiary’s death
118 222 Exemption available to other beneficiary who acquires the CGT asset after the principal beneficiary’s death
118 225 Amount of exemption available after the principal beneficiary’s death—general
118 227 Amount of exemption available after the principal beneficiary’s death—cost base and reduced cost base
118 230 Application of CGT events E5 and E7 in relation to main residence exemption and special disability trusts
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Compulsory acquisitions of adjacent land only
118 240 What the following provisions are about
118 245 CGT events happening only to adjacent land
118 250 Compulsory acquisitions of adjacent land
118 255 Maximum exempt area
118 260 Partial exemption rules
118 265 Extension to adjacent structures
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Subdivision 118 D—Insurance and superannuation
118 300 Insurance policies
118 305 Superannuation
118 310 RSA’s
118 313 Superannuation agreements under the Family Law Act
118 315 Segregated exempt assets of life insurance companies
118 320 Segregated current pension assets of a complying superannuation entity
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Subdivision 118 E—Units in pooled superannuation trusts
118 350 Units in pooled superannuation trusts
Subdivision 118 F—Venture capital investment
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Guide to Subdivision 118 F
118 400 What this Subdivision is about
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Operative provisions
118 405 Exemption for certain foreign venture capital investments through venture capital limited partnerships
118 407 Exemption for certain venture capital investments through early stage venture capital limited partnerships
118 408 Partial exemption for some capital gains otherwise fully exempt under section 118 407
118 410 Exemption for certain foreign venture capital investments through Australian venture capital funds of funds
118 415 Exemption for certain venture capital investments by foreign residents
118 420 Meaning of eligible venture capital partner etc.
118 425 Meaning of eligible venture capital investment—investments in companies
118 427 Meaning of eligible venture capital investment—investments in unit trusts
118 428 Additional investment requirements for ESVCLPs
118 430 Meaning of at risk
118 432 Findings of substantially novel applications of technology
118 435 Special rule relating to investment in foreign resident holding companies
118 440 Meaning of permitted entity value
118 445 Meaning of committed capital
118 450 Values of assets and investments of entities without auditors
118 455 Impact Assessment of this Subdivision
Subdivision 118 G—Venture capital: investment by superannuation funds for foreign residents
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Guide to Subdivision 118 G
118 500 What this Subdivision is about
118 505 Exemption for certain foreign venture capital
118 510 Meaning of resident investment vehicle
118 515 Meaning of venture capital entity
118 520 Meaning of superannuation fund for foreign residents
118 525 Meaning of venture capital equity
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Subdivision 118 H—Demutualisation of Tower Corporation
118 550 Demutualisation of Tower Corporation
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Subdivision 118 I—Look through earnout rights
118 560 Object
118 565 Look through earnout rights
118 570 Extra ways a CGT asset can be an active asset
118 575 Creating and ending look through earnout rights
118 580 Temporarily disregard capital losses affected by look through earnout rights
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Division 121—Record keeping
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Guide to Division 121
121 10 What this Division is about
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Operative provisions
121 20 What records you must keep
121 25 How long you must retain the records
121 30 Exceptions
121 35 Asset register entries
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Volume 4
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Chapter 3—Specialist liability rules
Part 3 3—Capital gains and losses: special topics
Division 122—Roll over for the disposal of assets to, or the creation of assets in, a wholly owned company
Guide to Division 122
122 1 What this Division is about
Subdivision 122 A—Disposal or creation of assets by an individual or trustee to a wholly owned company
Guide to Subdivision 122 A
122 5 What this Subdivision is about
When is a roll over available
122 15 Disposal or creation of assets—wholly owned company
122 20 What you receive for the trigger event
122 25 Other requirements to be satisfied
122 35 What if the company undertakes to discharge a liability (disposal case)
122 37 Rules for working out what a liability in respect of an asset is
Replacement asset roll over if you dispose of a CGT asset
122 40 Disposal of a CGT asset
Replacement asset roll over if you dispose of all the assets of a business
122 45 Disposal of all the assets of a business
122 50 All assets acquired on or after 20 September 1985
122 55 All assets acquired before 20 September 1985
122 60 Assets acquired before and after 20 September 1985
Replacement asset roll over for a creation case
122 65 Creation of asset
Same asset roll over consequences for the company (disposal case)
122 70 Consequences for the company (disposal case)
Same asset roll over consequences for the company (creation case)
122 75 Consequences for the company (creation case)
Subdivision 122 B—Disposal or creation of assets by partners to a wholly owned company
Guide to Subdivision 122 B
122 120 What this Subdivision is about
When is a roll over available
122 125 Disposal or creation of assets—wholly owned company
122 130 What the partners receive for the trigger event
122 135 Other requirements to be satisfied
122 140 What if the company undertakes to discharge a liability (disposal case)
122 145 Rules for working out what a liability in respect of an interest in an asset is
Replacement asset roll over if partners dispose of a CGT asset
122 150 Capital gain or loss disregarded
122 155 Disposal of post CGT or pre CGT interests
122 160 Disposal of both post CGT and pre CGT interests
Replacement asset roll over if the partners dispose of all the assets of a business
122 170 Capital gain or loss disregarded
122 175 Other consequences
122 180 All interests acquired on or after 20 September 1985
122 185 All interests acquired before 20 September 1985
122 190 Interests acquired before and after 20 September 1985
Replacement asset roll over for a creation case
122 195 Creation of asset
Same asset roll over consequences for the company (disposal case)
122 200 Consequences for the company (disposal case)
Same asset roll over consequences for the company (creation case)
122 205 Consequences for the company (creation case)
Division 124—Replacement asset roll overs
Guide to Division 124
124 1 What this Division is about
124 5 How to find your way around this Division
Subdivision 124 A—General rules
124 10 Your ownership of one CGT asset ends
124 15 Your ownership of more than one CGT asset ends
124 20 Share and interest sale facilities
Subdivision 124 B—Asset compulsorily acquired, lost or destroyed
When a roll over is available
124 70 Events giving rise to a roll over
124 75 Other requirements if you receive money
124 80 Other requirements if you receive an asset
The consequences of a roll over being available
124 85 Consequences for receiving money
124 90 Consequences for receiving an asset
124 95 You receive both money and an asset
Subdivision 124 C—Statutory licences
124 140 New statutory licences
124 145 Rollover consequences—capital gain or loss disregarded
124 150 Rollover consequences—partial roll over
124 155 Roll over consequences—all original licences were post CGT
124 160 Roll over consequences—all original licences were pre CGT
124 165 Roll over consequences—some original licences were pre CGT, others were post CGT
Subdivision 124 D—Strata title conversion
124 190 Strata title conversion
Subdivision 124 E—Exchange of shares or units
124 240 Exchange of shares in the same company
124 245 Exchange of units in the same unit trust
Subdivision 124 F—Exchange of rights or options
124 295 Exchange of rights or option to acquire shares in a company
124 300 Exchange of rights or option to acquire units in a unit trust
Subdivision 124 I—Change of incorporation
Guide to Subdivision 124 I
124 510 What this Subdivision is about
Object of this Subdivision
124 515 Object of this Subdivision
Change of incorporation without change of entity
124 520 Change of incorporation without change of entity
Old corporation wound up
124 525 Old corporation wound up
Special consequences of some roll overs
124 530 Shares in company replacing pre CGT and post CGT mix of interest and rights in body
124 535 Rights as member of Indigenous corporation replacing pre CGT and post CGT mix of interest and rights in body
Subdivision 124 J—Crown leases
Guide to Subdivision 124 J
124 570 What this Subdivision is about
Operative provisions
124 575 Extension or renewal of Crown lease
124 580 Meaning of Crown lease
124 585 Original right differs in area from new right
124 590 Part of original right excised
124 595 Treating parts of new right as separate assets
124 600 What is the roll over?
124 605 Change of lessor
Subdivision 124 K—Depreciating assets
124 655 Roll over for depreciating assets
124 660 Right granted to associate
Subdivision 124 L—Prospecting and mining entitlements
Guide to Subdivision 124 L
124 700 What this Subdivision is about
Operative provisions
124 705 Extension or renewal of prospecting or mining entitlement
124 710 Meaning of prospecting entitlement and mining entitlement
124 715 Original entitlement differs in area from new entitlement
124 720 Part of original entitlement excised
124 725 Treating parts of new entitlement as separate assets
124 730 What is the roll over?
Subdivision 124 M—Scrip for scrip roll over
Guide to Subdivision 124 M
124 775 What this Subdivision is about
Operative provisions
124 780 Replacement of shares
124 781 Replacement of trust interests
124 782 Transfer or allocation of cost base of shares acquired by acquiring entity etc.
124 783 Meaning of significant stakeholder, common stakeholder, significant stake and common stake
124 783A Rights that affect stakes
124 784 Cost base of equity or debt given within acquiring group
124 784A When arrangement is a restructure
124 784B What is the cost base and reduced cost base when arrangement is a restructure?
124 784C Cost base of equity or debt given within acquiring group
124 785 What is the roll over?
124 790 Partial roll over
124 795 Exceptions
124 800 Interest received for pre CGT interest
124 810 Certain companies and trusts not regarded as having 300 members or beneficiaries
Subdivision 124 N—Disposal of assets by a trust to a company
Guide to Subdivision 124 N
124 850 What this Subdivision is about
Operative provisions
124 855 What this Subdivision deals with
124 860 Requirements for roll over
124 865 Entities both choose the roll over
124 870 Roll over for owner of units or interests in a trust
124 875 Effect on the transferor and transferee
Subdivision 124 P—Exchange of a membership interest in an MDO for a membership interest in another MDO
Guide to Subdivision 124 P
124 975 What this Subdivision is about
Operative provisions
124 980 Exchange of membership interests in an MDO
124 985 What the roll over is for post CGT interests
124 990 Partial roll over
124 995 Pre CGT interests
Subdivision 124 Q—Exchange of stapled ownership interests for ownership interests in a unit trust
Guide to Subdivision 124 Q
124 1040 What this Subdivision is about
Operative provisions
124 1045 Exchange of stapled securities
124 1050 Conditions
124 1055 Consequences of the roll over for exchanging members
124 1060 Consequences of the roll over for interposed trust
Subdivision 124 R—Water entitlements
Guide to Subdivision 124 R
124 1100 What this Subdivision is about
Replacement case
124 1105 Replacement water entitlements roll over
124 1110 Roll over consequences—capital gain or loss disregarded
124 1115 Roll over consequences—partial roll over
124 1120 Roll over consequences—all original entitlements post CGT
124 1125 Roll over consequences—all original entitlements pre CGT
124 1130 Roll over consequences—some original entitlements pre CGT, others post CGT
Reduction case
124 1135 Reduction in water entitlements roll over
124 1140 Roll over consequences—capital gain or loss disregarded
124 1145 Roll over consequences—all original entitlements post CGT
124 1150 Roll over consequences—some original entitlements pre CGT, others post CGT
Variation to CGT asset case
124 1155 Roll over for variation to CGT asset
124 1160 Roll over consequences
124 1165 Roll over consequences—partial roll over
Subdivision 124 S—Interest realignment arrangements
Guide to Subdivision 124 S
124 1220 What this Subdivision is about
Operative provisions
124 1225 Disposals of interests under interest realignment arrangements
124 1230 Roll over consequences—partial roll over
124 1235 Roll over consequences—all original interests were post CGT and pre UCA
124 1240 Roll over consequences—all original interests were pre CGT
124 1245 Roll over consequences—original interests were of mixed CGT status, all were pre UCA
124 1250 Roll over consequences—some original interests were pre UCA
Division 125—Demerger relief
Guide to Division 125
125 1 What this Division is about
Subdivision 125 A—Object of this Division
125 5 Object of this Division
Subdivision 125 B—Consequences for owners of interests
Guide to Subdivision 125 B
125 50 Guide to Subdivision 125 B
Operative provisions
125 55 When a roll over is available for a demerger
125 60 Meaning of ownership interest and related terms
125 65 Meanings of demerger group, head entity and demerger subsidiary
125 70 Meanings of demerger, demerged entity and demerging entity
125 75 Exceptions to subsection 125 70(2)
125 80 What is the roll over?
125 85 Cost base adjustments where CGT event happens but no roll over chosen
125 90 Cost base adjustments where no CGT event
125 95 No other cost base adjustment after demerger
125 100 No further demerger relief in some cases
Subdivision 125 C—Consequences for members of demerger group
Guide to Subdivision 125 C
125 150 Guide to Subdivision 125 C
Operative provisions
125 155 Certain capital gains or losses disregarded for demerging entity
125 160 No CGT event J1
125 165 Adjusted capital loss for value shift under a demerger
125 170 Reduced cost base reduction if demerger asset subject to roll over
Subdivision 125 D—Public trading trusts
Guide to Subdivision 125 D
125 225 Guide to Subdivision 125 D
Operative provisions
125 230 Application of Division to public trading trusts
Subdivision 125 E—Miscellaneous
125 235 Share and interest sale facilities
Division 126—Same asset roll overs
Guide to Division 126
126 1 What this Division is about
Subdivision 126 A—Marriage or relationship breakdowns
126 5 CGT event involving spouses
126 15 CGT event involving company or trustee
126 20 Subsequent CGT event happening to roll over asset where transferor was a CFC or a non resident trust
126 25 Conditions for the purposes of subsections 126 5(3A) and 126 15(5)
Subdivision 126 B—Companies in the same wholly owned group
Guide to Subdivision 126 B
126 40 What this Subdivision is about
Operative provisions
126 45 Roll over for members of wholly owned group
126 50 Requirements for roll over
126 55 When there is a roll over
126 60 Consequences of roll over
126 75 Originating company is a CFC
126 85 Effect of roll over on certain liquidations
Subdivision 126 C—Changes to trust deeds
Guide to Subdivision 126 C
126 125 What this Subdivision is about
126 130 Changes to trust deeds
126 135 Consequences of roll over
Subdivision 126 D—Small superannuation funds
126 140 CGT event involving small superannuation funds
Subdivision 126 E—Entitlement to shares after demutualisation and scrip for scrip roll over
Guide to Subdivision 126 E
126 185 What this Subdivision is about
Operative provisions
126 190 When there is a roll over
126 195 Consequences of roll over
Subdivision 126 G—Transfer of assets between certain trusts
Guide to Subdivision 126 G
126 215 What this Subdivision is about
Operative provisions
126 220 Object of this Subdivision
126 225 When a roll over may be chosen
126 230 Beneficiaries’ entitlements not be discretionary etc.
126 235 Exceptions for roll over
126 240 Consequences for the trusts
126 245 Consequences for beneficiaries—general approach for working out cost base etc.
126 250 Consequences for beneficiaries—other approach for working out cost base etc.
126 255 No other cost base etc. adjustment for beneficiaries
126 260 Giving information to beneficiaries
126 265 Interest sale facilities
Division 128—Effect of death
Guide to Division 128
128 1 What this Division is about
General rules
128 10 Capital gain or loss when you die is disregarded
128 15 Effect on the legal personal representative or beneficiary
128 20 When does an asset pass to a beneficiary?
128 25 The beneficiary is a trustee of a superannuation fund etc.
Special rules for joint tenants
128 50 Joint tenants
Division 130—Investments
Guide to Division 130
130 1 What this Division is about
Subdivision 130 A—Bonus shares and units
Guide to Subdivision 130 A
130 15 Acquisition time and cost base of bonus equities
Operative provisions
130 20 Issue of bonus shares or units
Subdivision 130 B—Rights
130 40 Exercise of rights
130 45 Timing rules
130 50 Application to options
Subdivision 130 C—Convertible interests
130 60 Shares or units acquired by converting a convertible interest
Subdivision 130 D—Employee share schemes
130 75 Objects of Subdivision
130 80 ESS interests acquired under employee share schemes
130 85 Interests in employee share trusts
130 90 Shares held by employee share trusts
130 95 Shares and rights in relation to ESS interests
130 97 Application of certain provisions of Division 83A
Subdivision 130 E—Exchangeable interests
130 100 Exchangeable interest
130 105 Shares acquired in exchange for the disposal or redemption of an exchangeable interest
Subdivision 130 F—Exploration investments
130 110 Reducing the reduced cost base before disposal
Division 132—Leases
132 1 Lessee incurs expenditure to get lease term varied or waived
132 5 Lessor pays lessee for improvements
132 10 Grant of a long term lease
132 15 Lessee of land acquires reversionary interest of lessor
Division 134—Options
134 1 Exercise of options
Division 137—Granny flat arrangements
Subdivision 137 A—When CGT events do not happen
Guide to Subdivision 137 A
137 1 What this Subdivision is about
Operative provisions
137 10 Meaning of key terms
137 15 CGT event does not happen when a certain kind of granny flat arrangement is entered into
137 20 CGT event does not happen when a certain kind of granny flat arrangement is varied
137 25 CGT event does not happen when a certain kind of granny flat arrangement is terminated
Division 149—When an asset stops being a pre CGT asset
Subdivision 149 A—Key concepts
149 10 What is a pre CGT asset?
149 15 Majority underlying interests in a CGT asset
Subdivision 149 B—When asset of non public entity stops being a pre CGT asset
149 25 Which entities are affected
149 30 Effects if asset no longer has same majority underlying ownership
149 35 Cost base elements of asset that stops being a pre CGT asset
Subdivision 149 C—When asset of public entity stops being a pre CGT asset
149 50 Which entities are affected
149 55 Entity to give the Commissioner evidence periodically as to whether asset still has same majority underlying ownership
149 60 What the evidence must show
149 70 Effects if asset no longer has same majority underlying ownership
149 75 Cost base elements of asset that stops being a pre CGT asset
149 80 No more evidence needed after asset stops being a pre CGT asset
Subdivision 149 F—How to treat a “demutualised” public entity
149 162 Subdivision applies only if entity gives sufficient evidence
149 165 Members treated as having underlying interests in assets until demutualisation
149 170 Effect of demutualisation of interposed company
Division 152—Small business relief
Guide to Division 152
152 1 What this Division is about
Subdivision 152 A—Basic conditions for relief under this Division
Guide to Subdivision 152 A
152 5 What this Subdivision is about
Basic conditions for relief
152 10 Basic conditions for relief
152 12 Special conditions for CGT event D1
Maximum net asset value test
152 15 Maximum net asset value test
152 20 Meaning of net value of the CGT assets
Active asset test
152 35 Active asset test
152 40 Meaning of active asset
152 45 Continuing time periods for involuntary disposals
Treatment of passively held CGT assets
152 47 Spouses or children taken to be affiliates for certain passively held CGT assets
152 48 Working out an entity’s aggregated turnover for passively held CGT assets
152 49 Businesses that are winding up
Significant individual test
152 50 Significant individual test
152 55 Meaning of significant individual
CGT concession stakeholder
152 60 Meaning of CGT concession stakeholder
Small business participation percentage
152 65 Small business participation percentage
152 70 Direct small business participation percentage
152 75 Indirect small business participation percentage
Nomination of controllers of discretionary trust
152 78 Trustee of discretionary trust may nominate beneficiaries to be controllers of trust
CGT event happens to asset or interest within 2 years of an individual’s death
152 80 CGT event happens to an asset or interest within 2 years of individual’s death
Subdivision 152 B—Small business 15 year exemption
Guide to Subdivision 152 B
152 100 What this Subdivision is about
152 105 15 year exemption for individuals
152 110 15 year exemption for companies and trusts
152 115 Continuing time periods for involuntary disposals
152 125 Payments to company’s or trust’s CGT concession stakeholders are exempt
Subdivision 152 C—Small business 50% reduction
Guide to Subdivision 152 C
152 200 What this Subdivision is about
152 205 You get the small business 50% reduction
152 210 You may also get the small business retirement exemption and small business roll over relief
152 215 15 year rule has priority
152 220 You may choose not to apply this Subdivision
Subdivision 152 D—Small business retirement exemption
Guide to Subdivision 152 D
152 300 What this Subdivision is about
152 305 Choosing the exemption
152 310 Consequences of choice
152 315 Choosing the amount to disregard
152 320 Meaning of CGT retirement exemption limit
152 325 Company or trust conditions
152 330 15 year rule has priority
Subdivision 152 E—Small business roll over
Guide to Subdivision 152 E
152 400 What this Subdivision is about
Operative provisions
152 410 When you can obtain the roll over
152 415 What the roll over consists of
152 420 Rules where an individual who has obtained a roll over dies
152 430 15 year rule has priority
Part 3 5—Corporate taxpayers and corporate distributions
Division 160—Corporate loss carry back tax offset for 2020 21, 2021 22 or 2022 23 for businesses with turnover under $5 billion
Guide to Division 160
160 1 What this Division is about
Subdivision 160 A—Entitlement to and amount of loss carry back tax offset
160 5 Entitlement to loss carry back tax offset
160 10 Amount of loss carry back tax offset
Subdivision 160 B—Loss carry back choice
160 15 Loss carry back choice
160 16 Changing a loss carry back choice
160 20 Entity must have had turnover less than $5 billion for loss year
160 25 Entity must have been a corporate tax entity during relevant years
160 30 Transferred tax losses, income tax liabilities etc. not included
160 35 Integrity rule—no loss carry back tax offset if scheme entered into
Division 164—Non share capital accounts for companies
Guide to Division 164
164 1 What this Division is about
Operative provisions
164 5 Object
164 10 Non share capital account
164 15 Credits to non share capital account
164 20 Debits to non share capital account
Division 165—Income tax consequences of changing ownership or control of a company
Guide to Division 165
165 1 What this Division is about
Subdivision 165 A—Deducting tax losses of earlier income years
Guide to Subdivision 165 A
165 5 What this Subdivision is about
Operative provisions
165 10 To deduct a tax loss
165 12 Company must maintain the same owners
165 13 Alternatively, the company must satisfy the business continuity test
165 15 The same people must control the voting power, or the company must satisfy the business continuity test
165 20 When company can deduct part of a tax loss
Subdivision 165 B—Working out the taxable income and tax loss for the income year of the change
Guide to Subdivision 165 B
165 23 What this Subdivision is about
165 25 Summary of this Subdivision
165 30 Flow chart showing the application of this Subdivision
When a company must work out its taxable income and tax loss under this Subdivision
165 35 On a change of ownership, unless the company satisfies the business continuity test
165 37 Who has more than a 50% stake in the company during a period
165 40 On a change of control of the voting power in the company, unless the company satisfies the business continuity test
Working out the company’s taxable income
165 45 First, divide the income year into periods
165 50 Next, calculate the notional loss or notional taxable income for each period
165 55 How to attribute deductions to periods
165 60 How to attribute assessable income to periods
165 65 How to calculate the company’s taxable income for the income year
Working out the company’s tax loss
165 70 How to calculate the company’s tax loss for the income year
Special rules that apply if the company is in partnership
165 75 How to calculate the company’s notional loss or notional taxable income for a period when the company was a partner
165 80 How to calculate the company’s share of a partnership’s notional loss or notional net income for a period if both entities have the same income year
165 85 How to calculate the company’s share of a partnership’s notional loss or notional net income for a period if the entities have different income years
165 90 Company’s full year deductions include a share of partnership’s full year deductions
Subdivision 165 CA—Applying net capital losses of earlier income years
Guide to Subdivision 165 CA
165 93 What this Subdivision is about
Operative provisions
165 96 When a company cannot apply a net capital loss
Subdivision 165 CB—Working out the net capital gain and the net capital loss for the income year of the change
Guide to Subdivision 165 CB
165 99 What this Subdivision is about
When a company must work out its net capital gain and net capital loss under this Subdivision
165 102 On a change of ownership, or of control of voting power, unless the company satisfies the business continuity test
Working out the company’s net capital gain and net capital loss
165 105 First, divide the income year into periods
165 108 Next, calculate the notional net capital gain or notional net capital loss for each period
165 111 How to work out the company’s net capital gain
165 114 How to work out the company’s net capital loss
Subdivision 165 CC—Change of ownership or control of company that has an unrealised net loss
Guide to Subdivision 165 CC
165 115 What this Subdivision is about
165 115AA Special rules to save compliance costs
Operative provisions
165 115A Application of Subdivision
165 115B What happens when the company makes a capital loss or becomes entitled to a deduction in respect of a CGT asset after a changeover time