Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

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

Division 114 - Indexation of cost base

SECTION 114-30 Asset requirements for indexation to apply for a cost base worked out under subsection 110-36(1A)

114-30(1)
This section sets out requirements for indexation to be included under subsection 110-36(1A) in the * cost base of a * CGT asset for the purposes of working out your * capital gain from a * CGT event happening in relation to the CGT asset if:

(a) you are an individual; and

(b) you make the capital gain directly or, because of section 115-215 , as a beneficiary of a trust.

114-30(2)
The * CGT asset must not be an asset for which either of the following sections applies in relation to the * capital gain:

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

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

Note 1:

If you are a beneficiary of a trust, the requirements in this section do not affect whether indexation is included in the cost base of the CGT asset for the purposes of working out whether the trust estate makes a capital gain. If section 115-102 or 115-125 (the discount section ) applies for your capital gain, then in working out your capital gain:

(a) the cost base will be adjusted to remove the effect of indexation (see subsection 115-225(5) ); and

(b) instead, the discount relating to the discount section applies (see paragraph 115-215(4)(a) ).

Note 2:

However, the result in paragraphs (a) and (b) of note 1 does not happen for your capital gain if the trust chooses under the discount section for that section not to apply. If the trust makes this choice, the indexation included in the cost base of the CGT asset will flow through to working out your capital gain (see subsection 115-215(3)(a) ).

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