INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 19 - Goodwill  

SECTION 160ZZR   EXEMPTION OF PART OF GAIN ATTRIBUTABLE TO GOODWILL  

160ZZR(1)   [Application of section]  

Where -

(a) a taxpayer disposes of, or of an interest in, a business (in this section referred to as the ``relevant business'' ), being a disposal that includes, or includes an interest in, the goodwill of the business;

(b) in a case to which paragraph (c) does not apply - the net value of the relevant business, or the value of the taxpayer's interest in the net value of the relevant business, as the case may be, is less than the exemption threshold for the year of income in which the disposal takes place;

(c) if, at the time of the disposal, there is another business that is, or there are other businesses that are, associated with the relevant business - the sum of the net values of the relevant business and the associated business or associated businesses, or the sum of the values of the taxpayer's interests in the net values of the relevant business and the associated business or associated businesses, as the case may be, is less than the exemption threshold for the year of income in which the disposal takes place; and

(d) a capital gain is deemed for the purposes of this Part to have accrued to the taxpayer in respect of the disposal of, or of the taxpayer's interest in, the goodwill;

the amount of the capital gain shall be deemed to be reduced by half.

160ZZR(2)   [Associated business]  

For the purposes of subsection (1):

(a) a business (in this paragraph referred to as the ``associated business'' ) shall be taken to be associated with the relevant business if:

(i) where the taxpayer is not a company and does not carry on the relevant business in the capacity of a trustee - the associated business is carried on by the taxpayer otherwise than in the capacity of a trustee;

(ii) where the taxpayer is a company (other than a company in the capacity of a trustee) - the associated business is carried on by the company, or by another company that is related to the company, otherwise than in the capacity of a trustee; or

(iii) where the taxpayer carries on the relevant business in the capacity of a trustee of a trust estate - the associated business is carried on by the taxpayer in the capacity of a trustee of that trust estate or of an associated trust estate; and

(b) a reference to the net value of a business is a reference to the amount by which the sum of the values of the assets (including goodwill) of the business exceeds the sum of the liabilities of the business; and

(c) the expression ``exemption threshold'' has the meaning given by section 160ZZRAA .

160ZZR(3)   [Disposal of interest in goodwill where roll-over relief may apply]  

If a taxpayer makes an election under paragraph 160ZZPQ(1)(f) in relation to the disposal of an interest in goodwill, this section does not apply, and is taken never to have applied, in respect of the disposal.