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

162   Subsection 110(1)

Insert:

non-exempt ordinary capital gain for a notional CGT event means any capital gain that would (apart from this Division) arise from 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; and

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