Treasury Laws Amendment (Tax Reform No. 1) Act 2026 (49 of 2026)

Schedule 1   CGT adjustments

Part 1   Main amendments

Income Tax Assessment Act 1997

14   Section 114-1

Repeal the section, substitute:

114-1 Indexing elements of cost base

(1) In working out the *cost base of a *CGT asset under subsection 110-36(1A), index expenditure incurred in each element (except the third element).

Note 1: The expenditure can include giving property (see section 103-5).

Note 2: Subdivision 960-M shows you how to index amounts (see subsections 960-275(1B) and (1C) in particular).

Note 3: You have to work out the cost base of a CGT asset if a CGT event happens in relation to it or if there is a cost base modification.

Note 4: You cannot index expenditure in the third element (costs of ownership) (see subsection 960-275(4)).

(2) In working out the *cost base of a *CGT asset under subsection 110-36(1), index expenditure incurred in each element (except the third element) at or before the time mentioned in paragraph 110-36(1)(a).

Note 1: The expenditure can include giving property (see section 103-5).

Note 2: Subdivision 960-M shows you how to index amounts. Indexation under subsection 110-36(1) does not take account of inflation after 30 September 1999 (see subsections 960-275(2) and (3)).

Note 3: You have to work out the cost base of a CGT asset if a CGT event happens in relation to it or if there is a cost base modification.

Note 4: You cannot index expenditure in the third element (costs of ownership) (see subsection 960-275(4)).

Note 5: Indexation under subsection 110-36(1) is not relevant to expenditure incurred after 11.45 am on 21 September 1999 or any expenditure relating to a CGT asset acquired after that time.