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

417   Section 304

Repeal the section, substitute:

304 CGT rules are primary code for treatment of gains and losses

(1) This section applies if:

(a) a CGT event happens that involves a CGT asset (unless a capital gain or capital loss arising from the event is to be disregarded); or

(b) a CGT event happens:

(i) that involves a CGT asset; and

(ii) for which there is a roll-over under Part 3-3 of the Income Tax Assessment Act 1997;

(unless a capital gain or capital loss arising from the event would have to be disregarded even without the roll-over);

and the asset was owned by a taxpayer immediately before the event.

(2) An amount is not included in the taxpayer's assessable income under section 6-5 of the Income Tax Assessment Act 1997 in respect of the event unless:

(a) the asset is a security; or

(b) the amount is a gain attributable to currency exchange rate fluctuations.

(3) None of these apply in respect of the event:

(a) sections 15-15 and 25-40 of the Income Tax Assessment Act 1997; or

(b) sections 25A and 52 of this Act.

(4) The taxpayer cannot deduct an amount under section 8-1 of the Income Tax Assessment Act 1997 in respect of the event unless:

(a) the asset is a security; or

(b) the amount is a loss attributable to currency exchange rate fluctuations.