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 112-180   Pre-CGT assets - defer a gain from CGT event K6 from the deemed sale until the later realisation event happens  
Application

112-180(1)    
This section applies if:

(a)    you own * shares in a company or an interest in a trust; and

(b)    under subsection 112-175(2) , you are taken to have sold the shares or interest (the deemed sale ) and acquired them again; and

(c)    * CGT event K6 happens on 30 June 2027 as a result of the deemed sale, and you make a * capital gain from this CGT event (the initial notional gain ); and

(d)    you continue to hold the shares or interest until a * realisation event happens in relation to them on or after 1 July 2027.

Disregard the initial notional gain because it is to be deferred

112-180(2)    
Disregard the initial notional gain, except for the purposes of subsection (3) .

Deferring an initial notional gain

112-180(3)    
For the purposes of Division 102 :

(a)    in the income year in which the * realisation event happens in relation to the * CGT asset - you are treated as having made a * capital gain ( your deferred gain ):

(i) for the * CGT event K6 mentioned in paragraph (1)(c) ; and

(ii) that is a * discount capital gain if the initial notional gain is a discount capital gain; and

(iii) that is equal to the amount of the initial notional gain; and

(b)    disregard section 102-20 in relation to your deferred gain.

Note 1:

If the initial notional gain is a discount capital gain, then under step 5 of the method statement in subsection 102-5(1) , the 50% discount mentioned in paragraph 115-100(aa) or (ab) can apply to your deferred gain.

Note 2:

For a trust, a beneficiary of the trust may also be taken to have made, because of section 115-215 , a capital gain in relation to the deferred gain.