Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 104 - CGT events  

Subdivision 104-B - Use and enjoyment before title passes  

SECTION 104-15   Use and enjoyment before title passes: CGT event B1  

104-15(1)    
CGT event B1 happens if you enter into an agreement with another entity under which:

(a) the right to the use and enjoyment of a *CGT asset you own passes to the other entity; and

(b) title in the asset will or may pass to the other entity at or before the end of the agreement.

Note:

Division 240 provides for the inclusion of amounts under hire purchase agreements in assessable income.

104-15(2)    
The time of the event is when the other entity first obtains the use and enjoyment of the asset.

104-15(3)    

You make a capital gain if the *capital proceeds from the agreement 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.

Exceptions

104-15(4)    
A *capital gain or *capital loss you make is disregarded if:

(a) title in the asset does not pass to the other entity at or before the end of the agreement; or

(b) you *acquired the asset before 20 September 1985.