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Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

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Division 104 - CGT events  

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Guide to Division 104  

SECTION 104-5   Summary of the CGT events  

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CGT events
Event number and description Time of event is: Capital gain is: Capital loss is:
A1 Disposal of a CGT asset when disposal contract is entered into or, if none, when entity stops being asset ' s owner capital proceeds from disposal less asset ' s cost base asset ' s reduced cost base less capital proceeds
[ See section 104-10 ]
.
B1 Use and enjoyment before title passes when use of CGT asset passes capital proceeds less asset ' s cost base asset ' s reduced cost base less capital proceeds
[ See section 104-15 ]
.
C1 Loss or destruction of a CGT asset when compensation is first received or, if none, when loss discovered or destruction occurred capital proceeds less asset ' s cost base asset ' s reduced cost base less capital proceeds
[ See section 104-20 ]
.
C2 Cancellation, surrender and similar endings when contract ending asset is entered into or, if none, when asset ends capital proceeds from ending less asset ' s cost base asset ' s reduced cost base less capital proceeds
[ See section 104-25 ]
.
C3 End of option to acquire shares etc. when option ends capital proceeds from granting option less expenditure in granting it expenditure in granting option less capital proceeds
[ See section 104-30 ]
.
D1 Creating contractual or other rights when contract is entered into or right is created capital proceeds from creating right less incidental costs of creating it incidental costs of creating right less capital proceeds
[ See section 104-35 ]
.
D2 Granting an option when option is granted capital proceeds from grant less expenditure to grant it expenditure to grant option less capital proceeds
[ See section 104-40 ]
.
D3 Granting a right to income from mining when contract is entered into or, if none, when right is granted capital proceeds from grant of right less expenditure to grant it expenditure to grant right less capital proceeds
[ See section 104-45 ]
.
D4 Entering into a conservation covenant when covenant is entered into capital proceeds from covenant less cost base apportioned to the covenant reduced cost base apportioned to the covenant less capital proceeds from covenant
[ See section 104-47 ]
.
E1 Creating a trust over a CGT asset when trust is created capital proceeds from creating trust less asset ' s cost base asset ' s reduced cost base less capital proceeds
[ See section 104-55 ]
.
E2 Transferring a CGT asset to a trust when asset transferred capital proceeds from transfer less asset ' s cost base asset ' s reduced cost base less capital proceeds
[ See section 104-60 ]
.
E3 Converting a trust to a unit trust when trust is converted market value of asset at that time less its cost base asset ' s reduced cost base less that market value
[ See section 104-65 ]
.
E4 Capital payment for trust interest when trustee makes payment non-assessable part of the payment less cost base of the trust interest no capital loss
[ See section 104-70 ]
.
E5 Beneficiary becoming entitled to a trust asset when beneficiary becomes absolutely entitled for trustee - market value of CGT asset at that time less its cost base; for beneficiary - that market value less cost base of beneficiary ' s capital interest for trustee - reduced cost base of CGT asset at that time less that market value; for beneficiary - reduced cost base of beneficiary ' s capital interest less that market value
[ See section 104-75 ]
.
E6 Disposal to beneficiary to end income right the time of the disposal for trustee - market value of CGT asset at that time less its cost base; for beneficiary - that market value less cost base of beneficiary ' s right to income for trustee - reduced cost base of CGT asset at that time less that market value; for beneficiary - reduced cost base of beneficiary ' s right to income less that market value
[ See section 104-80 ]
.
E7 Disposal to beneficiary to end capital interest the time of the disposal for trustee - market value of CGT asset at that time less its cost base; for beneficiary - that market value less cost base of beneficiary ' s capital interest for trustee - reduced cost base of CGT asset at that time less that market value; for beneficiary - reduced cost base of beneficiary ' s capital interest less that market value
[ See section 104-85 ]
.
E8 Disposal by beneficiary of capital interest when disposal contract entered into or, if none, when beneficiary ceases to own CGT asset capital proceeds less appropriate proportion of the trust ' s net assets appropriate proportion of the trusts ' s net assets less capital proceeds
[ See section 104-90 ]
.
E9 Creating a trust over future property when entity makes agreement market value of the property (as if it existed when agreement made) less incidental costs in making agreement incidental costs in making agreement less market value of the property (as if it existed when agreement made)
[ See section 104-105 ]
.
E10 Annual cost base reduction exceeds cost base of interest in AMIT when reduction happens excess of cost base reduction over cost base no capital loss
[See section 104-107A]
.
F1 Granting a lease for grant of lease - when entity enters into lease contract or, if none, at start of lease; for lease renewal or extension - at start of renewal or extension capital proceeds less expenditure on grant, renewal or extension expenditure on grant, renewal or extension less capital proceeds
[ See section 104-110 ]
.
F2 Granting a long term lease for grant of lease - when lessor grants lease; for lease renewal or extension - at start of renewal or extension capital proceeds from grant, renewal or extension less cost base of leased property reduced cost base of leased property less capital proceeds from grant, renewal or extension
[ See section 104-115 ]
.
F3 Lessor pays lessee to get lease changed when lease term is varied or waived no capital gain amount of expenditure to get lessee ' s agreement
[ See section 104-120 ]
.
F4 Lessee receives payment for changing lease when lease term is varied or waived capital proceeds less cost base of lease no capital loss
[ See section 104-125 ]
.
F5 Lessor receives payment for changing lease when lease term is varied or waived capital proceeds less expenditure in relation to variation or waiver expenditure in relation to variation or waiver less capital proceeds
[ See section 104-130 ]
.
G1 Capital payment for shares when company pays non-assessable amount payment less cost base of shares no capital loss
[ See section 104-135 ]
.
G2 (Repealed by No 90 of 2002)
.
G3 Liquidator or administrator declares shares or financial instruments worthless when declaration was made no capital gain shares ' or financial instruments ' reduced cost base
[ See section 104-145 ]
.
H1 Forfeiture of a deposit when deposit is forfeited deposit less expenditure in connection with prospective sale expenditure in connection with prospective sale less deposit
[ See section 104-150 ]
.
H2 Receipt for event relating to a CGT asset when act, transaction or event occurred capital proceeds less incidental costs incidental costs less capital proceeds
[ See section 104-155 ]
.
I1 Individual or company stops being an Australian resident when individual or company stops being Australian resident for each CGT asset the person owns, its market value less its cost base for each CGT asset the person owns, its reduced cost base less its market value
[ See section 104-160 ]
.
I2 Trust stops being a resident trust when trust ceases to be resident trust for CGT purposes for each CGT asset the trustee owns, its market value of asset less its cost base for each CGT asset the trustee owns, its reduced cost base less its market value
[ See section 104-170 ]
.
J1 Company stops being member of wholly-owned group after roll-over when the company stops market value of asset at time of event less its cost base reduced cost base of asset less that market value
[ See section 104-175 ]
.
J2 Change in relation to replacement asset or improved asset after a roll-over under Subdivision 152-E when the change happens the amount mentioned in subsection 104-185(5) no capital loss
[ See section 104-185 ]
.
J3 (Repealed by No 55 of 2007 )
.
J4 Trust fails to cease to exist after a roll-over under Subdivision 124-N when the failure happens market value of asset less asset ' s cost base reduced cost base of asset less asset ' s market value
[ See section 104-195 ]
.
J5 Failure to acquire replacement asset and to incur fourth element expenditure after a roll-over under Subdivision 152-E at the end of the replacement asset period the amount of the capital gain that you disregarded under Subdivision 152-E no capital loss
[ See section 104-197 ]
.
J6 Cost of acquisition of replacement asset or amount of fourth element expenditure, or both, not sufficient to cover disregarded capital gain at the end of the replacement asset period the amount mentioned in subsection 104-198(3) no capital loss
[ See section 104-198 ]
.
K1 As the result of an incoming international transfer of a Kyoto unit or an Australian carbon credit unit from your foreign account or your nominee ' s foreign account, you start to hold the unit as a registered emissions unit
[See section 104-205]		 when you start to hold the unit as a registered emissions unit market value of unit less its cost base reduced cost base of unit less its market value
.
K2 Bankrupt pays amount in relation to debt when payment is made no capital gain so much of payment as relates to denied part of a net capital loss
[ See section 104-210 ]
.
K3 Asset passing to tax-advantaged entity when individual dies market value of asset at death less its cost base reduced cost base of asset less that market value
[ See section 104-215 ]
.
K4 CGT asset starts being trading stock when asset starts being trading stock market value of asset less its cost base reduced cost base of asset less its market value
[ See section 104-220 ]
.
K5 Special capital loss from collectable that has fallen in market value when CGT event A1, C2 or E8 happens to shares in the company, or an interest in the trust, that owns the collectable no capital gain market value of the shares or interest (as if the collectable had not fallen in market value) less the capital proceeds from CGT event A1, C2 or E8
[ See section 104-225 ]
.
K6 Pre-CGT shares or trust interest when another CGT event involving the shares or interest happens capital proceeds from the shares or trust interest (so far as attributable to post-CGT assets owned by the company or trust) less the assets ' cost bases no capital loss
[ See section 104-230 ]
.
K7 Balancing adjustment occurs for a depreciating asset that you used for purposes other than taxable purposes When balancing adjustment event occurs Termination value less cost times fraction Cost less termination value times fraction
[ See section 104-235 ]
.
K8 Direct value shifts affecting your equity or loan interests in a company or trust the decrease time for the interests the gain worked out under section 725-365 no capital loss
[ See section 104-250 and Division 725 ]
.
K9 Entitlement to receive payment of a carried interest when you become entitled to receive payment capital proceeds from entitlement no capital loss
[ See section 104-255 ]
.
K10 You make a forex realisation gain covered by item 1 of the table in subsection 775-70(1) when the forex realisation event happens the forex realisation gain no capital loss
[ See section 104-260 ]
.
K11 You make a forex realisation loss covered by item 1 of the table in subsection 775-75(1) when the forex realisation event happens no capital gain the forex realisation loss
[ See section 104-265 ]
.
K12 Foreign hybrid loss exposure adjustment just before the end of the income year no capital gain the amount stated in subsection 104-270(3)
[ See section 104-270 ]
.
L1 Reduction under section 705-57 in tax cost setting amount of assets of entity becoming subsidiary member of consolidated group or MEC group Just after entity becomes subsidiary member no capital gain amount of reduction
[ See section 104-500 ]
.
L2 Amount remaining after step 3A etc. of joining allocable cost amount is negative Just after entity becomes subsidiary member amount remaining no capital loss
[ See section 104-505 ]
.
L3 Tax cost setting amounts for retained cost base assets exceed joining allocable cost amount Just after entity becomes subsidiary member amount of excess no capital loss
[ See section 104-510 ]
.
L4 No reset cost base assets against which to apply excess of net allocable cost amount on joining Just after entity becomes subsidiary member no capital gain amount of excess
[ See section 104-515 ]
.
L5 Amount remaining after step 4 of leaving allocable cost amount is negative When entity ceases to be subsidiary member amount remaining no capital loss
[ See section 104-520 ]
.
L6 Error in calculation of tax cost setting amount for joining entity ' s assets: CGT event L6 start of the income year when the Commissioner becomes aware of the errors the net overstated amount resulting from the errors, or a portion of that amount the net understated amount resulting from the errors, or a portion of that amount
[ See section 104-525 ]
.
L7 (Repealed by No 56 of 2010)
.
L8 Reduction in tax cost setting amount for reset cost base assets on joining cannot be allocated Just after entity becomes subsidiary member no capital gain amount of reduction that cannot be allocated
[ See section 104-535 ]

Note:

Subsection 230-310(4) (which deals with hedging financial arrangements) provides that in certain circumstances a CGT event is taken to have occurred in relation to a hedging financial arrangement at the same time as a CGT event actually occurs in relation to a hedged item covered by the arrangement.
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