Income Tax Assessment Act 1997
To be a *discount capital gain, the *capital gain must have been worked out:
(a) using a *cost base that has been calculated without reference to indexation at any time; or
(b) for a capital gain that arose under *CGT event K7 - using the *cost of the *depreciating asset concerned.
A listed investment company must also calculate capital gains without reference to indexation in order to allow its shareholders to access the concessions in Subdivision 115-D .
For the purposes of working out whether the *capital gain is a *discount capital gain and the amount of that gain, the *cost base taken into account in working out the capital gain may be recalculated without reference to indexation if the cost base had an element including indexation because of another provision of this Act. This subsection has effect despite that other provision.
This lets a capital gain of an entity (the gain entity ) on a CGT asset be a discount capital gain even if:
In 1995 Elizabeth acquired land from her ex-husband under an order made by a court under the Family Law Act 1975 . Former section 160ZZM of the Income Tax Assessment Act 1936 treated her as having paid $56,000 for the land, equal to her ex-husband ' s indexed cost base for it. His cost base for the land then was $40,000.
In 2000, she sold the land for capital proceeds of $150,000.
Her discount capital gain on the land is $110,000 (equal to the capital proceeds less the cost base for the land without indexation).
This section does not apply to a *capital gain worked out under subsection 104-255(3) (about carried interests).