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What is a CGT asset having the necessary connection with Australia?

Last updated 4 December 2006

In determining whether an asset is a CGT asset having the necessary connection with Australia, the assumption that the CFC is a resident of Australia is ignored. In almost all cases, however, the residency assumption will make no difference.

Broadly, a CGT asset having the necessary connection with Australia is:

  • land or buildings in Australia
  • assets used in carrying on business through a permanent establishment in Australia
  • a share, or an interest in a share, in a company which was a resident private company in the income year in which the disposal took place
  • a share, or an interest in a share, of a company which was an Australian resident and not a private company and at any time in the preceding five years a taxpayer or an associate, alone or together, owned 10% of the issued capital of the company
  • an interest in an Australian resident trust
  • a unit in a unit trust which was an Australian resident where, at any time in the preceding five years, a taxpayer or an associate, alone or together, owned 10% of the units in the unit trust
  • an option or right to acquire an asset referred to above
  • certain assets that have been transferred under the rollover provisions
  • certain rights that have a connection with Australia.

Note: The specific list of CGT assets having the necessary connection with Australia is set out in section 136-25 of the ITAA 1997.

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