CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-1
-
CAPITAL GAINS AND LOSSES: GENERAL TOPICS
History
Pt 3-1 inserted by No 46 of 1998.
Division 115
-
Discount capital gains and trusts
'
net capital gains
History
Div 115 inserted by No 169 of 1999.
Subdivision 115-C
-
Rules about trusts with net capital gains
Operative provisions
SECTION 115-215
Assessing presently entitled beneficiaries
Purpose
115-215(1)
The purpose of this section is to ensure that appropriate amounts of the trust estate
'
s net income attributable to the trust estate
'
s *capital gains are treated as a beneficiary
'
s capital gains when assessing the beneficiary, so:
(a)
the beneficiary can apply *capital losses against gains; and
(b)
the beneficiary can apply the appropriate *discount percentage (if any) to gains.
115-215(2)
(Repealed by No 62 of 2011)
History
S 115-215(2) repealed by No 62 of 2011, s 3 and Sch 2 item 9, effective 29 June 2011. For application provisions see note under s
115-200
. S 115-215(2) formerly read:
Application
115-215(2)
This section treats you as having certain extra *capital gains, and gives you a deduction, if:
(a)
you are the beneficiary of the trust estate; and
(b)
your assessable income for the income year includes an amount (the
trust amount
):
(i)
under paragraph
97(1)(a)
of the
Income Tax Assessment Act 1936
; or
(ii)
under subsection
98A(1)
or
(3)
of that Act; or
(iii)
under section
100
of that Act.
(iv)
(Repealed by
No 32 of 2008
)
S 115-215(2) amended by
No 32 of 2008
, s 3 and Sch 1 item 13, by substituting para (b)(iii) for para (b)(iii) and (iv), applicable to fund payments made in relation to the first income year starting on or after the first 1 July after 23 June 2008 and later income years. Para (b)(iii) and (iv) formerly read:
(iii)
under section
100
of that Act; or
(iv)
under section
99F
of that Act.
S 115-215(2) amended by
No 79 of 2007
, s 3 and Sch 10 item 10, by inserting para (b)(iv), applicable to the first income year starting on or after the first 1 July after the day on which
No 79 of 2007
receives the Royal Assent (ie 21 June 2007) and later income years.
S 115-215(2) amended by
No 79 of 2007
, s 3 and Sch 9 item 16, by substituting para (b)(ii) and (iii), applicable in relation to income years starting on or after 1 July 2006. Para (b)(ii) and (iii) formerly read:
(ii)
under subsection
98A(1)
of that Act because you are a beneficiary described in subsection
98(4)
of that Act; or
(iii)
under subsection
100(1)
of that Act.
Extra capital gains
115-215(3)
If you are a beneficiary of the trust estate, for each *capital gain of the trust estate, Division
102
applies to you as if you had:
(a)
if the capital gain was not reduced under either step 3 of the method statement in subsection
102-5(1)
(discount capital gains) or Subdivision
152-C
(small business 50% reduction)
-
a capital gain equal to the amount mentioned in subsection
115-225(1)
; and
(b)
if the capital gain was reduced under either step 3 of the method statement or Subdivision
152-C
but not both (even if it was further reduced by the other small business concessions)
-
a capital gain equal to twice the amount mentioned in subsection
115-225(1)
; and
(c)
if the capital gain was reduced under both step 3 of the method statement and Subdivision
152-C
(even if it was further reduced by the other small business concessions)
-
a capital gain equal to 4 times the amount mentioned in subsection
115-225(1)
.
Note:
This subsection does not affect the amount (if any) included in your assessable income under Division
6
of Part
III
of the
Income Tax Assessment Act 1936
because of the capital gain of the trust estate. However, Division
6E
of that Part may have the effect of reducing the amount included in your assessable income under Division
6
of that Part by an amount related to the capital gain you have under this subsection.
History
S 115-215(3) substituted by No 62 of 2011, s 3 and Sch 2 item 9, effective 29 June 2011. For application provisions see note under s
115-200
. S 115-215(3) formerly read:
Extra capital gains
115-215(3)
For each *capital gain (the
trust gain
) of the trust estate, Division
102
applies to you as if you had:
(a)
if the trust gain was not reduced under
either
step 3 of the method statement in subsection
102-5(1)
(*discount capital gains)
or
Subdivision
152-C
(small business 50% reduction)
-
a capital gain equal to the part (if any) of the trust amount that is attributable to the trust gain; and
(b)
if the trust gain was reduced under
either
step 3 of the method statement
or
Subdivision
152-C
but not both (even if it was further reduced by the other small business concessions)
-
a capital gain equal to twice the part (if any) of the trust amount that is attributable to the trust gain; and
(c)
if the trust gain was reduced under
both
step 3 of the method statement
and
Subdivision
152-C
(even if it was further reduced by the other small business concessions)
-
a capital gain equal to 4 times the part (if any) of the trust amount that is attributable to the trust gain.
115-215(4)
For each *capital gain of yours mentioned in paragraph (3)(b) or (c):
(a)
if the relevant trust gain was reduced under step 3 of the method statement in subsection
102-5(1)
-
Division
102
also applies to you as if your capital gain were a *discount capital gain, if you are the kind of entity that can have a discount capital gain; and
(b)
if the relevant trust gain was reduced under Subdivision
152-C
-
the capital gain remaining after you apply step 3 of the method statement is reduced by 50%.
Note:
This ensures that your share of the trust estate
'
s net capital gain is taxed as if it were a capital gain you made (assuming you made the same choices about cost bases including indexation as the trustee).
115-215(4A)
To avoid doubt, subsection (3) treats you as having a *capital gain for the purposes of Division
102
, despite section
102-20
.
History
S 115-215(4A) inserted by No 173 of 2000.
Section 118-20 does not reduce extra capital gains
115-215(5)
To avoid doubt, section
118-20
does not reduce a *capital gain that subsection (3) treats you as having for the purpose of applying Division
102
.
115-215(6)
(Repealed by No 62 of 2011)
History
S 115-215(6) repealed by No 62 of 2011, s 3 and Sch 2 item 10, effective 29 June 2011. For application provisions see note under s
115-200
. S 115-215(6) formerly read:
Deduction
115-215(6)
You can deduct for the income year the part (if any) of the trust amount that is attributable to the trust estate
'
s *net capital gain mentioned in subsection
102-5(1)
.
Note:
This deduction ensures you are not taxed twice on the part of the trust amount that is attributable to the trust estate
'
s net capital gain.
History
S 115-215 substituted by No 165 of 1999 and inserted by No 169 of 1999.
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