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  

Exempt or loss-denying transactions

SECTION 118-75   Marriage or relationship breakdown settlements  

118-75(1)    
A *capital gain or *capital loss you make as a result of *CGT event C2 happening is disregarded if:

(a) you make the gain or loss in relation to a right that directly relates to the breakdown of a relationship between *spouses; and

(b) at the time of the CGT event:

(i) you and your spouse or former spouse are separated; and

(ii) there is no reasonable likelihood of cohabitation being resumed.

Example:

Maude receives an amount from Claude by way of a settlement directly related to the breakdown of their marriage. CGT event C2 would happen to Maude on satisfaction of her legally enforceable right to the amount. Any capital gain or loss that Maude makes in these circumstances is disregarded.

118-75(2)    
For the purposes of this section, the question whether *spouses or former spouses have separated is to be determined in the same way as it is for the purposes of section 48 of the Family Law Act 1975 (as affected by sections 49 and 50 of that Act).