Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 112 - Modifications to cost base and reduced cost base  

Subdivision 112-E - Deemed sales just before, and reacquisitions on, 1 July 2027  

SECTION 112-155   Australian resident individuals - deemed sale just before, and reacquisition on, 1 July 2027  

Application

112-155(1)    
This section applies in relation to a * CGT asset of yours if:

(a)    on 30 June 2027, the asset is not a * pre-CGT asset; and

(b)    you are an individual who * acquired the asset and then held it throughout the period:

(i) starting at a time before 1 July 2027; and

(ii) ending at the end of 30 June 2027; and

(c)    you continue to hold the asset until a * realisation event happens in relation to the asset on or after 1 July 2027; and

(d)    if it were assumed that you make a * discount capital gain from the realisation event - section 115-105 (about foreign or temporary residents) would not apply to the discount capital gain; and

(e)    the asset is not an asset for which either of the following sections applies in relation to a * capital gain you make in relation to the realisation event:

(i) section 115-102 (about new residential dwellings);

(ii) section 115-125 (about affordable housing).

Deemed sale and reacquisition

112-155(2)    
For the purposes of this Part, Part 3-3 and Subdivision 960-M , you are taken:

(a)    to have sold the asset just before 1 July 2027, with your * capital proceeds for that sale taken to be the amount applying under subsection (3) ; and

(b)    to have * acquired the asset again just after that sale for an amount equal to those capital proceeds.

Note 1:

The sale under paragraph (a) happens on 30 June 2027, and the reacquisition under paragraph (b) happens on 1 July 2027.

Note 2:

Any capital gain or loss you make from the sale on 30 June 2027 is disregarded (and deferred) until the income year in which the realisation event happens. You can wait until then before working out the amount of the capital gain or loss (see section 112-160 ).

Note 3:

Subdivision 960-M deals with indexation of a CGT asset ' s cost base.

112-155(3)    
The * capital proceeds are taken to be equal to:

(a)    unless paragraph (b) applies - the asset ' s * market value just before 1 July 2027; or

(b)    if you choose to use an apportioning method determined under section 112-185 - the amount of capital proceeds worked out using that method.

112-155(4)    
For the purposes of paragraph 103-25(1)(a) , the * realisation event is the relevant * CGT event for such a choice.

Note 1:

Section 103-25 sets out rules for making choices.

Note 2:

This subsection and section 103-25 mean you do not have to make a choice until the day you lodge your income tax return for the income year in which the realisation event happens (see paragraph 103-25(1)(a) ).

Note 3:

The realisation event is the event mentioned in paragraph (1)(c) .

112-155(5)    
Except for the purposes of section 112-185 (about making apportioning determinations), none of the following apply in relation to a sale and acquisition mentioned in paragraphs (2)(a) and (b) for which a choice is made under paragraph (3)(b) :

(a)    Subdivisions 112-A , 112-B , 112-C and 112-D (about modifications of the cost base and reduced cost base);

(b)    sections 116-25 to 116-60 (about modifications of the general rules about capital proceeds).