Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-30 - SUPERANNUATION  

Division 294 - Transfer balance cap  

Subdivision 294-B - CGT relief  

SECTION 294-120   Superannuation funds using the proportionate method - disregard initial capital gain but recognise deferred notional gain  

Application

294-120(1)    
This section applies in relation to a CGT asset of a complying superannuation fund if:

(a) section 294-115 applies in relation to the CGT asset; and

(b) as a result of paragraph 294-115(3)(a) , the fund makes a capital gain in respect of the asset (disregarding this section); and

(c) the trustee of the fund makes a choice for the purposes of this paragraph in respect of the asset in accordance with subsection (2).

294-120(2)    
A choice made for the purposes of paragraph (1)(c):

(a) is to be in the approved form; and

(b) can only be made on or before the day by which the trustee of the fund is required to lodge the fund ' s income tax return for the 2016-17 income year; and

(c) cannot be revoked.

Disregard initial capital gain

294-120(3)    
Disregard the capital gain mentioned in paragraph (1)(b).

Recognition of deferred notional gain

294-120(4)    
The deferred notional gain is the 2016-17 non-exempt proportion of the amount of the fund ' s net capital gain for the 2016-17 income year determined on the assumptions that:

(a) subsection (3) of this section does not apply; and

(b) the fund made no capital gains in that income year other than the gain mentioned in paragraph (1)(b); and

(c) the fund made no capital losses in that income year; and

(d) the fund had no previously unapplied net capital losses from earlier income years.

294-120(5)    
For the purposes of Division 102 of the Income Tax Assessment Act 1997 , if a realisation event happens to the asset in an income year that starts on or after 1 July 2017:

(a) treat the fund as having made a capital gain in that income year equal to the deferred notional gain; and

(b) disregard section 102-20 of that Act in respect of that capital gain; and

(c) treat that capital gain as not being a discount capital gain.

294-120(6)    
Subsection 295-390(1) of the Income Tax Assessment Act 1997 does not apply to the amount by which a net capital gain is increased (or comes into existence) as a result of subsection (5).

294-120(7)    
In this section:

2016-17 non-exempt proportion
means 1 minus the proportion mentioned in subsection 295-390(3) of the Income Tax Assessment Act 1997 in respect of the fund for the 2016-17 income year.

deferred notional gain
has the meaning given by subsection (4).