Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 109 - Acquisition of CGT assets  

Subdivision 109-A - Operative rules  

SECTION 109-5   General acquisition rules  

109-5(1)    

In general, you acquire a *CGT asset when you become its owner. In this case, the time when you *acquire the asset is when you become its owner.

109-5(2)    

This table sets out specific rules for the circumstances in which, and the time at which, you acquire a *CGT asset as a result of a *CGT event happening.

Note:

The full list of CGT events is in section 104-5 .

Acquisition rules (CGT events)
Event Number	In these circumstances:	You acquire the asset at this time:
A1 (case 1)	An entity *disposes of a CGT asset to you (except where you compulsorily acquire it)	when the disposal contract is entered into or, if none, when the entity stops being the asset's owner
.
A1 (case 2)	You compulsorily acquire a *CGT asset from another entity	the earliest of:
		(a)	when you paid compensation to the entity; or
		(b)	when you became the asset's owner; or
		(c)	when you entered the asset under the power of compulsory acquisition; or
		(d)	when you took possession of it under that power
.
B1	You enter into an agreement to obtain the use and enjoyment of a *CGT asset	when you first obtain the use and enjoyment of the asset (unless title does not pass to you at or before the end of the agreement)
.
D1	An entity creates contractual or other rights in you	when the contract is entered into or the right created
.
D2	An entity grants an option to you	when the option is granted
.
D3	An entity grants you a right to receive *ordinary income from mining	when the contract is entered into or, if none, when the right is granted
.
D4	You enter into a *conservation covenant as a covenantee	when the covenant is entered into
.
E1	An entity creates a trust over a *CGT asset and you are the trustee	when the trust is created
.
E2	An entity transfers a *CGT asset to a trust and you are the trustee	when the asset is transferred
.
E3	A trust over a *CGT asset is converted to a unit trust and you are the trustee	when the trust is converted
.
E5	You as beneficiary under a trust become absolutely entitled to a *CGT asset of the trust as against the trustee (disregarding any legal disability)	when you become absolutely entitled
.
E6	Trustee *disposes of a *CGT asset of the trust to you to satisfy a right you had to receive *ordinary income from the trust	when the *disposal occurs
.
E7	Trustee *disposes of a *CGT asset of the trust to you to satisfy your interest, or part of it, in trust capital	when the *disposal occurs
.
E8	Beneficiary under a trust *disposes of its interest, or part of it, in trust capital to you	when disposal contract is entered into or, if none, when beneficiary stops being interest's owner
.
E9	An entity creates a trust over future property and you are the trustee	when the entity makes the agreement to create the trust
.
F1	A lessor grants a lease to you, or renews or extends a lease	for grant of lease - when the contract is entered into or, if none, at the start of lease; for lease renewal or extension - at the start of renewal or extension
.
F2	A lessor grants a lease to you, or renews or extends a lease, and term is at least 50 years	for grant of lease - when lessor grants the lease; for lease renewal or extension - at the start of renewal or extension
.
K1	(Repealed by No 77 of 2001)
.
K3	An individual dies and a *CGT asset of the individual *passes to you (as a tax advantaged entity)	when the individual dies
.
K6	A *CGT event happens to *shares or an interest in a trust you own	when the other CGT event happens

Note 1:

For CGT events E1, E2 and E3, if the circumstances specified in the second column of the table happened to an asset before 12 January 1994, there may be no acquisition: see section 109-5 of the Income Tax (Transitional Provisions) Act 1997 .

Note 2:

The acquisition rule for CGT event E9 in the table does not apply to you as trustee if the agreement to create the trust was made before 12 noon on 12 January 1994: see section 109-5 of the Income Tax (Transitional Provisions) Act 1997 .