Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 116 - Capital proceeds  

Modifications to general rules  

SECTION 116-55  

116-55   Assumption of liability rule: modification 5  
The * capital proceeds from a * CGT event are increased if another entity * acquires the * CGT asset (the subject of the event) subject to a liability by way of security over the asset.

They are increased by the amount of the liability the other entity assumes.

Example:

You sell land for $ 150,000. You receive $ 50,000 (the capital proceeds) and the buyer becomes responsible for a $ 100,000 liability under an outstanding mortgage. The capital proceeds are increased by $ 100,000 to $ 150,000.