Tax Law Improvement Act (No. 1) 1998 (46 of 1998)

2   CGT (new Parts 3-1, 3-3 and 3-5)

3   Consequential amendment of the Income Tax Assessment Act 1936

161   Subsection 110(1)

Insert:

non-exempt modified capital gain for a notional CGT event means any capital gain that would (apart from this Division) arise from the event if Division 10 of Part IX applied in respect of the event, reduced as follows:

(a) if, had the gain instead been ordinary income derived when the gain was made, some or all of the ordinary income would have been exempt income under section 112C:

(i) reduce the gain by so much of that ordinary income as would have been so exempt; and

(ii) further reduce the rest of the gain (if any) by the proportion worked out using the formula in section 112A;

(b) otherwise - reduce the gain by the proportion worked out using the formula in section 112A.