Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 115 - Discount capital gains and certain trust capital gains  

Subdivision 115-CA - Extended application of rules about trusts with net capital gains (disregarding indexation)  

Operative provisions

SECTION 115-255   Extended application of Subdivision 115-C - disregarding indexation  

115-255(1)    
In addition to its application under subsection 115-210(1) , Subdivision 115-C applies as set out in this section if:

(a)    a trust estate has one or more * capital gains that have been worked out using a * cost base that includes indexation because of subsection 110-36(1A) ; and

(b)    that Subdivision does not apply under subsection 115-210(1) in relation to the trust estate for an income year; and

(c)    that Subdivision would so apply if, in working out whether the trust estate has a * net capital gain for the income year, the following assumptions applied in relation to each of those capital gains:

(i) in working out the amount of the capital gain before any reductions under the method statement in subsection 102-5(1) were applied, the * cost base was adjusted to remove the effect of indexation on its calculation;

(ii) the assumption in subparagraph (i) did not result in any changes to the application of * capital losses, previously unapplied * net capital losses or quarantined amounts (including how much of each of those was applied) under that method statement to reduce the capital gain.

115-255(2)    
Subdivision 115-C applies under this section as follows in relation to such a * capital gain of the trust estate (the trust gain ):

(a)    that Subdivision applies for the purposes of treating a beneficiary of the trust estate as having a related capital gain under subsection 115-215(3) in circumstances where subsection 115-225(5) would apply for working out the amount of the trust gain;

(b)    if paragraph (a) applies - section 115-235 applies for such a related capital gain;

(c)    that Subdivision applies for the purposes of increasing the trustee ' s assessable amount under subsection 115-220(2) or 115-222(4) in circumstances where subsection 115-225(5) would apply for working out the amount of the trust gain.

115-255(3)    
The reference to the trust estate ' s net income in subsection 115-215(1) does not limit the application of section 115-215 for those purposes.

115-255(4)    
To avoid doubt, subsection 115-210(2) applies in relation to the application of Subdivision 115-C under this section.

115-255(5)    
To avoid doubt, a reference in a * taxation law to Subdivision 115-C or a provision of that Subdivision includes a reference to that Subdivision, or that provision (as the case requires), as it applies because of this section.