INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-CB - Working out the net capital gain and the net capital loss for the income year of the change  

Working out the company's net capital gain and net capital loss

SECTION 165-111   165-111   How to work out the company ' s net capital gain  


The company ' s net capital gain for the income year is worked out in this way: Working out the company ' s net capital gain

Step 1.

Add up the *notional net capital gains (if any) worked out under section 165-108 .

Note:

A notional net capital loss for a period is not taken into account, but counts towards the company ' s net capital loss for the income year.


Step 2.

Add to the Step 1 amount so much of each amount included in the company ' s assessable income for the income year under:

  • (a) section 97 (Beneficiary of a trust estate who is not under a legal disability) of the Income Tax Assessment Act 1936 ; or
  • (b) section 98A (Non-resident beneficiaries assessable in respect of certain income) of that Act;
  • as is attributable to a *capital gain that the trust made outside the income year.

    Note:

    This is relevant only if the trust has an income year that starts and ends at a different time from when the company ' s income year starts and ends.


    Step 3.

    If the Step 2 amount is more than zero, reduce it by applying any unapplied *net capital losses from previous income years. (If this reduces it to zero, the company has no net capital gain for the income year.)

    Note:

    To apply net capital losses: see section 102-15 .


    Step 4.

    If the Step 3 amount is more than zero, it is the company ' s net capital gain .

    Note:

    For exceptions and modifications to these rules: see section 102-30 .


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