Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-3
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CAPITAL GAINS AND LOSSES: SPECIAL TOPICS
Division 152
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Small business relief
Subdivision 152-D
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Small business retirement exemption
SECTION 152-305
Choosing the exemption
Individual
152-305(1)
If you are an individual, you can choose to disregard all or part of a *capital gain if:
(a) the basic conditions in Subdivision 152-A are satisfied for the gain; and
(b) if you are under 55 just before you make the choice - you contribute an amount equal to the asset ' s *CGT exempt amount to a *complying superannuation fund or an *RSA; and
(c) the contribution is made:
152-305(1A)
If you receive the *capital proceeds from the *CGT event in instalments, paragraphs (1)(b) and (c) apply to each instalment in succession (up to the asset's *CGT exempt amount).
152-305(1B)
For the purposes of (but without limiting) subsection (1A), you are treated as receiving the *capital proceeds in instalments if:
(a) the *CGT event happened because you *disposed of the *CGT asset; and
(b) the capital proceeds from the disposal are increased by one or more *financial benefits that you receive under a *look-through earnout right.
Company or trust
152-305(2)
A company or a trust (except a public entity - see subsection (3)) can also choose to disregard such an amount if:
(a) the basic conditions in Subdivision 152-A are satisfied for the *capital gain; and
(b) the entity satisfies the significant individual test (see section 152-50 ); and
(c) the company or trust conditions in section 152-325 are satisfied.
152-305(3)
Entities of a kind referred to in subsection 328-125(8) cannot make the choice.
152-305(4)
Paragraphs (1)(a) and (2)(a) do not apply if the *capital gain arose from *CGT event J5 or J6.
View history note
Hide history noteIf you are an individual, you can choose to disregard all or part of a *capital gain if:
(a) the basic conditions in Subdivision 152-A are satisfied for the gain; and
(b) if you are under 55 just before you make the choice - you contribute an amount equal to the asset ' s *CGT exempt amount to a *complying superannuation fund or an *RSA; and
Note:
For the non-deductibility of the contribution, see subsection 290-150(4) .
(c) the contribution is made:
(i) if the relevant CGT event is CGT event J2, J5 or J6 - when you made the choice; or
(ii) otherwise - at the later of when you made the choice and when you received the proceeds.
Note 1:
Section 103-25 tells you when the choice must be made.
If you receive the *capital proceeds from the *CGT event in instalments, paragraphs (1)(b) and (c) apply to each instalment in succession (up to the asset's *CGT exempt amount).
For the purposes of (but without limiting) subsection (1A), you are treated as receiving the *capital proceeds in instalments if:
(a) the *CGT event happened because you *disposed of the *CGT asset; and
(b) the capital proceeds from the disposal are increased by one or more *financial benefits that you receive under a *look-through earnout right.
A company or a trust (except a public entity - see subsection (3)) can also choose to disregard such an amount if:
(a) the basic conditions in Subdivision 152-A are satisfied for the *capital gain; and
(b) the entity satisfies the significant individual test (see section 152-50 ); and
(c) the company or trust conditions in section 152-325 are satisfied.
Note:
Section 103-25 tells you when the choice must be made.
Entities of a kind referred to in subsection 328-125(8) cannot make the choice.
Paragraphs (1)(a) and (2)(a) do not apply if the *capital gain arose from *CGT event J5 or J6.
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