Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 116 - Capital proceeds  

Modifications to general rules  

SECTION 116-60   Misappropriation rule: modification 6  

116-60(1)    
The *capital proceeds from a *CGT event are reduced if your employee or *agent misappropriates (whether by theft, embezzlement, larceny or otherwise) all or part of those proceeds.

Note:

This rule exists because the general rules treat you as having received an amount when you are entitled to receive it.

116-60(2)    
The *capital proceeds are reduced by the amount misappropriated.

116-60(3)    
There is a further consequence if:

(a) those proceeds are reduced by the amount misappropriated; and

(b) you later receive an amount as *recoupment of all or part of the amount misappropriated.

Those proceeds are increased by the amount received.

116-60(4)    
This Part and Part 3-3 apply to the debt owed to you (the amount misappropriated) as if it were not a *CGT asset.

116-60(5)    
Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:

(a) you discover the misappropriation, or you receive an amount as *recoupment of all or part of the amount misappropriated, after you lodged your *income tax return for the income year; and

(b) the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.