INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 3 - Determination of capital gains and capital losses  

SECTION 160ZA   REDUCTIONS OF CAPITAL GAINS WHERE AMOUNT OTHERWISE ASSESSABLE  

160ZA(1)-(3)    

160ZA(4)   [Where amount otherwise assessable]  

Where:

(a) but for this subsection a capital gain (in this subsection called the ``notional capital gain'' ) would be deemed for the purposes of this Part to have accrued to a taxpayer during the year of income in respect of the disposal of an asset; and

(b) as a result of the disposal of the asset an amount or amounts (in this subsection called the ``included amount'' or the ``included amounts'' ) has or have been, or will be, included in the assessable income of the taxpayer in respect of any year of income under a provision of this Act other than this Part (other than an amount or amounts excluded by subsection (4A) or an amount or amounts included because of subsection 42-190(2) of the Income Tax Assessment Act 1997 as affected as mentioned in subsection 42-190(4) or (5) of that Act);

the following paragraphs have effect:

(c) if the notional capital gain exceeds the included amount or the sum of the included amounts - the amount of the capital gain that is deemed for the purposes of this Part to have accrued to the taxpayer during the year of income in respect of the disposal of the asset is an amount equal to the excess;

(d) if the notional capital gain does not exceed the included amount or the sum of the included amounts - no capital gain is deemed for the purposes of this Part to have accrued to the taxpayer during the year of income in respect of the disposal of the asset.

160ZA(4A)   [Amounts excluded from subsec (4)(b)]  

An amount is excluded from paragraph (4)(b) if it has been, or will be, included in the taxpayer's assessable income under a provision having effect where:

(a) the taxpayer recoups capital expenditure that was incurred in respect of the asset; and

(b) a deduction has been allowed or is allowable to the taxpayer in respect of the capital expenditure.

160ZA(4AA)   [Value of asset taken into account in determining previous income under sec 288A]  

If:

(a) apart from this subsection a capital gain (the ``notional capital gain'' ) would be taken for the purposes of this Part to have accrued during the year of income to a taxpayer that is the trustee of a superannuation fund in respect of the disposal of an asset; and

(b) the market value of the asset was taken into account in determining the fund's net previous income in respect of previous years of income under section 288A ;

the following paragraphs have effect:

(c) if the notional capital gain exceeds the amount that, apart from this subsection, would have been taken for the purposes of this Part to have accrued during the year of income to the taxpayer in respect of the disposal of the asset if the consideration in respect of the disposal had been equal to the market value referred to in paragraph (b) - the amount of the capital gain that is taken for the purposes of this Part to have accrued to the taxpayer during the year of income in respect of the disposal of the asset is an amount equal to the excess;

(d) in any other case - no capital gain is taken for the purposes of this Part to have accrued to the taxpayer during a year of income in respect of the disposal of the asset.

160ZA(4B)   [Market value of asset taken into account in determining previous income under sec 288B]  

If:

(a) apart from this subsection a capital gain (the ``notional capital gain'' ) would be taken for the purposes of this Part to have accrued during the year of income to a taxpayer that is the trustee of a superannuation fund in respect of the disposal of an asset; and

(b) the market value of the asset was taken into account in determining the fund's net previous income in respect of previous years of income under section 288B ;

the following paragraphs have effect:

(c) if the notional capital gain exceeds the amount that, apart from this subsection, would have been taken for the purposes of this Part to have accrued during the year of income to the taxpayer in respect of the disposal of the asset if the consideration in respect of the disposal had been equal to the market value referred to in paragraph (b) - the amount of the capital gain that is taken for the purposes of this Part to have accrued to the taxpayer during the year of income in respect of the disposal of the asset is an amount equal to the excess;

(d) in any other case - no capital gain is taken for the purposes of this Part to have accrued to the taxpayer during a year of income in respect of the disposal of the asset.

160ZA(5)   [Disposal of taxpayer's interest in partnership asset]  

Where:

(a) apart from this subsection, a capital gain (in this subsection called the ``notional capital gain'' ) would be taken for the purposes of this Part to have accrued to a taxpayer during the year of income in respect of the disposal of an asset (in this subsection called the ``taxpayer's asset'' ); and

(b) the taxpayer's asset is the taxpayer's interest in a partnership asset of a partnership in which the taxpayer is a partner; and

(c) as a result of the disposal, an amount or amounts (in this subsection and subsection (6) called the ``included amount'' or the ``included amounts'' ) has or have been, or will be, included in the assessable income of the partnership of any year of income under a provision of this Act other than this Part (other than an amount or amounts excluded by subsection (5A) or an amount or amounts included because of subsection 42-190(2) of the Income Tax Assessment Act 1997 as affected as mentioned in subsection 42-190(4) or (5) of that Act);

the following provisions have effect:

(d) if the notional capital gain exceeds the partner's portion of the included amount or included amounts - the amount of the capital gain that is taken for the purposes of this Part to have accrued to the taxpayer during the year of income in respect of the disposal of the taxpayer's asset is an amount equal to the excess;

(e) if the notional capital gain does not exceed the partner's portion of the included amount or included amounts - no capital gain is taken for the purposes of this Part to have accrued to the taxpayer during the year of income in respect of the disposal of the taxpayer's asset.

160ZA(5A)   [Amount excluded from subsec (5)(c)]  

An amount is excluded from paragraph (5)(c) if it has been, or will be, included in the partnership's assessable income under a provision having effect where:

(a) the partnership recoups capital expenditure that was incurred in respect of the asset; and

(b) a deduction has been allowed or is allowable to the partnership in respect of the capital expenditure.

160ZA(6)   [Partner's portion of the included amount]  

A reference in subsection (5) to the partner's portion of the included amount or included amounts is a reference to so much of the individual interest of the partner in the net income, or the partnership loss, of the partnership as is attributable to the included amount or sum of the included amounts.

160ZA(7)   [When other provisions disregarded]  

For the purposes of subsection (4) or (5), if a provision of this Act other than this Part has the effect that an amount that would otherwise be included in the assessable income of the taxpayer or partnership referred to in that subsection is not so included, or is only so included in part, then that provision of this Act is to be disregarded for the purposes of that subsection. This subsection is subject to subsection (7A).

160ZA(7A)   [Dividend exempt under sec 23AJ]  

Subsection (7) does not apply in relation to a dividend that is exempt from tax under section 23AJ to the extent that the dividend is:

(a) debited against a share capital account; or

(b) (Repealed by Act No 63 of 1998)

(c) debited against a reserve to the extent that it consists of profits from the revaluation of assets of a company that have not been disposed of by the company; or

(d) attributable, either directly or indirectly, to amounts that were transferred from an account or reserve of the company paying the dividend where the account or reserve is covered by one of the above paragraphs.

160ZA(8)   [Eligible termination payment]  

For the purposes of subsection (4), if an eligible termination payment (within the meaning of Subdivision AA of Division 2 of Part III ) is to be included in part in the assessable income of a taxpayer, then the whole of the payment is taken to be so included.