INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 152 - Small business relief  

Subdivision 152-D - Small business retirement exemption  

SECTION 152-325   Company or trust conditions  

Company or trust to make payments

152-325(1)  


A company or trust must make a payment (whether directly or indirectly through one or more interposed entities) to at least one of its *CGT concession stakeholders if:


(a) the company or trust makes a choice under this Subdivision to disregard a *capital gain from *CGT event J2, J5 or J6; or


(b) the company or trust receives an amount of *capital proceeds from a *CGT event for which it makes a choice under this Subdivision.

152-325(2)  
If the company or trust receives the *capital proceeds from the CGT event in instalments, subsection (1) applies to each instalment in succession (up to the relevant *CGT exempt amount).

152-325(2A)  


For the purposes of (but without limiting) subsection (2), the company or trust is treated as receiving the *capital proceeds in instalments if:


(a) the *CGT event happened because the company or trust *disposed of the *CGT asset; and


(b) the capital proceeds from the disposal are increased by one or more *financial benefits that the company or trust receives under a *look-through earnout right.

Amount and timing of payments

152-325(3)  
If a payment is made to more than one *CGT concession stakeholder, the amount of each such payment is to be worked out by reference to each individual ' s percentage (see subsection 152-315(5) ) of the relevant *CGT exempt amount.

152-325(3A)  


If the *CGT concession stakeholder to whom the payment is made is an employee of the company or trust, the payment must not be of a kind mentioned in section 82-135 (disregarding paragraph (fa) of that section).

152-325(4)  


The payment must be made by:


(a) if paragraph (1)(a) applies - 7 days after the company or trust makes the choice; and


(b) otherwise - the later of:


(i) 7 days after the company or trust makes the choice; and

(ii) 7 days after the company or trust receives an amount of *capital proceeds from the *CGT event.

152-325(5)  
The amount of the payment, or the sum of the amounts of the payments, required to be made under this section must be equal to the lesser of:


(a) either:


(i) if paragraph (1)(a) applies - the amount of the *capital gain from the *CGT event that the company or trust disregarded; or

(ii) otherwise - the amount of *capital proceeds received; and


(b) the relevant *CGT exempt amount. Payments may be joint or separate

152-325(6)  
If this section requires the company or trust to make 2 or more payments to a single *CGT concession stakeholder (whether or not by the same time), the company or trust may meet that requirement by making one payment or by making separate payments.

152-325(7)  


If a *CGT concession stakeholder is under 55 just before a payment is made under this section in relation to him or her:


(a) the company or trust must make the payment to the CGT concession stakeholder by contributing it for the stakeholder to a *complying superannuation fund or an *RSA in respect of the stakeholder; and


(b) the company or trust must notify the trustee of the fund or the *RSA provider at the time the contribution is made that the contribution is made in accordance with this section.

Note:

For the non-deductibility of the contribution, see subsection 290-150(4) .

152-325(8)  


For the purposes of Part 3-30 , treat a payment mentioned in paragraph (7)(a), made in accordance with this section, as a contribution made by the *CGT concession stakeholder. Payments are not dividends or frankable distributions

152-325(9)  


Subsection (10) applies if:


(a) a company makes a payment to comply with subsection (1) to:


(i) a *CGT concession stakeholder; or

(ii) an interposed entity, in relation to a CGT concession stakeholder; or


(b) both of the following apply:


(i) an interposed entity receives a payment (whether directly or indirectly through one or more interposed entities) that a company or trust makes to comply with subsection (1), in relation to a CGT concession stakeholder;

(ii) the interposed entity passes on the payment to the CGT concession stakeholder or another interposed entity.

152-325(10)  


This Act applies to the payment, to the extent that it is less than or equal to the amount mentioned in subsection (3) for the stakeholder, as if:


(a) it were not a *dividend; and


(b) it were not a *frankable distribution.

152-325(11)  


Subsection (10) applies in relation to the payment despite section 109 and Division 7A of Part III of the Income Tax Assessment Act 1936 .

 

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