Income Tax Assessment Act 1997



Division 104 - CGT events  

Subdivision 104-A - Disposals  

SECTION 104-10   Disposal of a CGT asset: CGT event A1  

CGT event A1 happens if you *dispose of a *CGT asset.


You dispose of a *CGT asset if a change of ownership occurs from you to another entity, whether because of some act or event or by operation of law. However, a change of ownership does not occur if you stop being the legal owner of the asset but continue to be its beneficial owner.

A change in the trustee of a trust does not constitute a change in the entity that is the trustee of the trust (see subsection 960-100(2) ). This means that CGT event A1 will not happen merely because of a change in the trustee.

The time of the event is:

(a) when you enter into the contract for the *disposal; or

(b) if there is no contract - when the change of ownership occurs.


In June 1999 you enter into a contract to sell land. The contract is settled in October 1999. You make a capital gain of $50,000.

The gain is made in the 1998-99 income year (the year you entered into the contract) and not the 1999-2000 income year (the year that settlement takes place).

Note 1:

If the contract falls through before completion, this event does not happen because no change in ownership occurs.

Note 2:

If the asset was compulsorily acquired from you: see subsection (6).


You make a capital gain if the *capital proceeds from the disposal are more than the asset ' s *cost base. You make a capital loss if those capital proceeds are less than the asset ' s *reduced cost base.



A *capital gain or *capital loss you make is disregarded if:

(a) you *acquired the asset before 20 September 1985; or

(b) for a lease that you granted:

(i) it was granted before that day; or

(ii) if it has been renewed or extended - the start of the last renewal or extension occurred before that day.
Note 1:

You can make a gain if you dispose of shares in a company, or an interest in a trust, that you acquired before that day: see CGT event K6.

Note 2:

A capital gain or loss you make because you assign a right under or in relation to a general insurance policy you held with an HIH company to the Commonwealth, the trustee of the HIH Trust or a prescribed entity is also disregarded: see section 322-15.

Note 3:

A capital gain or loss made by a demerging entity from CGT event A1 happening as a result of a demerger is also disregarded: see section 125-155 .

Note 4:

A capital gain or loss you make because of section 16AI of the Banking Act 1959 is disregarded: see section 253-10 of this Act. Section 16AI of the Banking Act 1959 :

  • (a) reduces your right to be paid an amount by an ADI in connection with an account to the extent of your entitlement under Division 2AA of Part II of that Act to be paid an amount by APRA; and
  • (b) provides that, to the extent of the reduction, the right becomes a right of APRA.
  • Note 5:

    A capital gain or loss you make because, under section 62ZZL of the Insurance Act 1973 , you dispose of a CGT asset consisting of your rights against a general insurance company to APRA is disregarded: see section 322-30 of this Act.

    Compulsory acquisition

    If the asset was *acquired from you by an entity under a power of compulsory acquisition conferred by an *Australian law or a *foreign law, the time of the event is the earliest of:

    (a) when you received compensation from the entity; or

    (b) when the entity became the asset ' s owner; or

    (c) when the entity entered it under that power; or

    (d) when the entity took possession under that power.


    You may be able to choose a roll-over if an asset is compulsorily acquired: see Subdivision 124-B .

    (Repealed by No 119 of 2013)

    View surrounding sectionsView surrounding sectionsBack to top

    This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.