Income Tax Assessment Act 1997
Hide history note
View history notePt 3-1 inserted by No 46 of 1998.
Div 104 inserted by No 46 of 1998.
CGT event D2 happens if you grant an option to an entity, or renew or extend an option you had granted.
Note:
Some options are not covered: see subsections (6) and (7).
104-40(2)
The time of the event is when you grant, renew or extend the option.
104-40(3)
You make a capital gain if the *capital proceeds from the grant, renewal or extension of the option are more than the expenditure you incurred to grant, renew or extend it. You make a capital loss if those capital proceeds are less .
104-40(4)
The expenditure can include giving property: see section 103-5 . However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income, or an amount to the extent that you have deducted or can deduct it.
Exceptions
104-40(5)
A *capital gain or *capital loss you make from the grant, renewal or extension of the option is disregarded if the option is exercised.
Note 1:
Section 134-1 sets out the consequences of an option being exercised.
Note 2:
A capital gain or capital loss you made for the 1997-98 income year or an earlier income year under former Part IIIA of the Income Tax Assessment Act 1936 is also disregarded where the option is exercised in the 1998-99 income year or a later one: see section 104-40 of the Income Tax (Transitional Provisions) Act 1997 .
S 104-40(5) amended by No 101 of 2006 , s 3 and Sch 2 item 680, by amending the reference to a repealed inoperative provision in note 2, effective 14 September 2006. For application and savings provisions see the CCH Australian Income Tax Legislation archive .
S 104-40(5) amended by No 114 of 2000 and No 94 of 1999.
104-40(6)
This section does not apply to an option granted, renewed or extended by a company or the trustee of a unit trust to *acquire a *CGT asset that is:
(a) *shares in the company or units in the unit trust; or
(b) debentures of the company or unit trust.
Note:
Section 104-30 deals with this situation.
104-40(7)
Nor does it apply to an option relating to a *personal use asset or a *collectable.
S 104-40 inserted by No 46 of 1998.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.
