Income Tax Assessment Act 1997



Division 116 - Capital proceeds  

Modifications to general rules  

SECTION 116-45   Non-receipt rule: modification 3  


The *capital proceeds from a *CGT event are reduced if:

(a) you are not likely to receive some or all (the unpaid amount ) of those proceeds; and

(b) this is not because of anything you (or your *associate) have done or omitted to do; and

(c) you took all reasonable steps to get the unpaid amount paid.

The capital proceeds are reduced by the unpaid amount.


This rule exists because the general rules treat you as having received an amount when you are entitled to receive it.


You sell a painting to another entity for $5,000 (the capital proceeds). You agree to accept monthly instalments of $100.

You receive $2,000, but then the other entity stops making payments. It becomes clear that you are not likely to receive the remaining $3,000. The capital proceeds are reduced to $2,000.

There is a further consequence if:

(a) those proceeds are reduced by the unpaid amount; but

(b) you later receive a part of that amount.

Those proceeds are increased by that part.

This Part and Part 3-3 apply to the debt owed to you (the unpaid amount) as if it were not a *CGT asset.


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