Income Tax Assessment Act 1997
Despite section 118-407 , you get only a partial exemption for a *capital gain from a *CGT event relating to an *eligible venture capital investment if:
(a) apart from this section, all of your share in the capital gain from the CGT event relating to the investment would be disregarded under section 118-407 ; and
(b) at the end of an income year to which subsection (4) applies (a valuation year ), the sum of the values of:
(i) the assets of the company or unit trust in which the investment is made; and
exceeds $250 million; and
(ii) the assets of each other entity that is a *connected entity of the company or unit trust;
(c) the CGT event happens after:
(i) if there is only one valuation year - the end of the period of 6 months after the end of that valuation year; or
(ii) if there is more than one valuation year - the end of the period of 6 months after the end of the earliest of those valuation years.
If subsection (1) applies, work out your *capital gain using the formula:
Normal capital gain − Valuation year capital gain
normal capital gain
is what your *capital gain from the *CGT event would be apart from section 118-407 and this section.
(a) if there is only one valuation year - at the end of the period of 6 months after the end of that valuation year; or
(b) if there is more than one valuation year - at the end of the period of 6 months after the end of the earliest of those valuation years.
Work out the capital gain based on what the *capital proceeds would have been, and on other matters relating to the amount of the gain being determined on a reasonable basis, if the CGT event resulting in the gain had happened at the end of that period.
Despite subsection (2), you are taken not to have a *capital gain, or a *capital loss, from the *CGT event if the amount worked out under the formula in that subsection would be less than zero. 118-408(4)
This subsection applies to any income year that:
(a) precedes the income year in which the *CGT event happens; but
(b) does not precede the income year in which the investment was made.
There must always be at least one valuation year, because paragraph 118-407(1)(d) ensures the CGT event will not happen in the year the investment was made.118-408(5)
Section 118-407 does not apply in relation to a *CGT event if this section applies in relation to the CGT event.