Income Tax Assessment Act 1997
CGT event D2 happens if you grant an option to an entity, or renew or extend an option you had granted.
Some options are not covered: see subsections (6) and (7).104-40(2)
The time of the event is when you grant, renew or extend the option. 104-40(3)
You make a capital gain if the *capital proceeds from the grant, renewal or extension of the option are more than the expenditure you incurred to grant, renew or extend it. You make a capital loss if those capital proceeds are less . 104-40(4)
The expenditure can include giving property: see section 103-5 . However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income, or an amount to the extent that you have deducted or can deduct it. Exceptions 104-40(5)
A *capital gain or *capital loss you make from the grant, renewal or extension of the option is disregarded if the option is exercised.
Section 134-1 sets out the consequences of an option being exercised.
A capital gain or capital loss you made for the 1997-98 income year or an earlier income year under former Part IIIA of the Income Tax Assessment Act 1936 is also disregarded where the option is exercised in the 1998-99 income year or a later one: see section 104-40 of the Income Tax (Transitional Provisions) Act 1997 .
This section does not apply to an option granted, renewed or extended by a company or the trustee of a unit trust to *acquire a *CGT asset that is:
(a) *shares in the company or units in the unit trust; or
(b) debentures of the company or unit trust.
Section 104-30 deals with this situation.104-40(7)
Nor does it apply to an option relating to a *personal use asset or a *collectable.
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