Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 118 - Exemptions  

Subdivision 118-A - General exemptions  

Anti-overlap provisions

SECTION 118-27   Division 230 financial arrangements and financial arrangements to which Subdivision 250-E applies  

118-27(1)    
A *capital gain or *capital loss you make:

(a) from a *CGT asset; or

(b) in creating a CGT asset; or

(c) from the discharge of a liability;

is disregarded if, at the time of the *CGT event, the asset or liability is, or is part of, a *Division 230 financial arrangement.

Note 1:

Paragraph (b) is relevant for CGT event D1.

Note 2:

Paragraph (c) is relevant for CGT event L7.

118-27(2)    
Subsection (1) does not apply to the following:

(a) a gain or loss that subsection 230-310(4) (which deals with hedging financial arrangements) provides is to be treated as a *capital gain or *capital loss;

(b) a loss that is reduced under subsection 230-465(2) , to the extent of that reduction (this is the extent to which the loss is of a capital nature).

118-27(3)    
Subsection (1) does not apply if the situation that gives rise to the *CGT event does not result in a gain from the arrangement being included in your assessable income under Division 230 , or in a loss from the arrangement entitling you to a deduction under Division 230 .

118-27(4)    

A *capital gain or *capital loss you make from a *CGT asset is disregarded if, at the time of the *CGT event, the asset is, or is part of, a *financial arrangement to which Subdivision 250-E applies.