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  • Treatment of other assets

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    Cash settlements

    No capital gains tax (CGT) liability arises for the ending of spouses’ rights that directly relate to the breakdown of their marriage or relationship, including if they receive cash as part of a breakdown settlement, provided the spouses separate and there is no reasonable likelihood of cohabitation being resumed.

    Rights that are created

    Your spouse (or a company or trustee) may create an asset in your favour. The table below shows how to calculate the first element of your cost base or reduced cost base.

    CGT event

    First element of cost base and reduced cost base

    Creating contractual or other rights (D1)

    Incidental costs incurred by the transferor that relate to the event

    Granting an option (D2)

    Expenditure incurred by the transferor to grant the option

    Granting a right to income from mining (D3)

    Expenditure incurred by the transferor to grant the right

    Granting a lease (F1)

    Expenditure incurred by the transferor on the grant renewal or extension of the lease

    You're taken to have acquired the asset at the time specified by the CGT event. For example, for CGT event D1, you acquire the asset at the time you enter into the contract or, if there is no contract, the time the right is created.

    See also:

    Superannuation interests

    Payment splits

    The CGT rollover may apply if an interest in a small super fund is subject to a payment split on the breakdown of a relationship between spouses, and a CGT asset of a small super fund is transferred to another complying super fund.

    A small super fund is one that is a complying fund and has fewer than five members.

    The consequences of rollover are the same as for transfers between spouses.

    Transfer of own interest in a small super fund

    A trustee of a small super fund may also qualify for the CGT rollover when the trustee transfers an asset or assets reflecting the entire personal interest of one of the spouses or former spouses to the trustee of another complying super fund for the benefit of that spouse. For the rollover to apply, both spouses must hold an interest in the small super fund before the transfer. This allows spouses in a small super fund to separate their super arrangements on the breakdown of their marriage or relationship without any CGT liability.

    Assets transferred by a company or trust

    If a company or a trustee of a trust transfers a CGT asset to a spouse, adjustments are required to the relevant cost base and reduced cost base of interests in the company or trust. These interests may be shares (or indirect interests in shares) in the company, units in a unit trust and other interests in the trust. They are reduced in value by an amount that reasonably reflects the fall in their market value as a result of the transfer of the CGT asset.

    In certain circumstances, the transfer of an asset from a company to a spouse who is a shareholder or an associate of a shareholder may be a dividend.

    If the transferor is a controlled foreign corporation or a foreign trust, there are special rules for working out the capital gain or loss for a subsequent CGT event.

    See also:

    Last modified: 17 Jul 2017QC 52263