Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

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

View history note

Division 104 - CGT events

View history note

Guide to Division 104

SECTION 104-5 Summary of the CGT events

View history reference

CGT events
Event number and description	Time of event is:	Capital gain is:	Capital loss is:
A1 Disposal of a CGT asset	when disposal contract is entered into or, if none, when entity stops being asset ' s owner	capital proceeds from disposal less asset ' s cost base	asset ' s reduced cost base less capital proceeds
[ See section 104-10 ]
.
B1 Use and enjoyment before title passes	when use of CGT asset passes	capital proceeds less asset ' s cost base	asset ' s reduced cost base less capital proceeds
[ See section 104-15 ]
.
C1 Loss or destruction of a CGT asset	when compensation is first received or, if none, when loss discovered or destruction occurred	capital proceeds less asset ' s cost base	asset ' s reduced cost base less capital proceeds
[ See section 104-20 ]
.
C2 Cancellation, surrender and similar endings	when contract ending asset is entered into or, if none, when asset ends	capital proceeds from ending less asset ' s cost base	asset ' s reduced cost base less capital proceeds
[ See section 104-25 ]
.
C3 End of option to acquire shares etc.	when option ends	capital proceeds from granting option less expenditure in granting it	expenditure in granting option less capital proceeds
[ See section 104-30 ]
.
D1 Creating contractual or other rights	when contract is entered into or right is created	capital proceeds from creating right less incidental costs of creating it	incidental costs of creating right less capital proceeds
[ See section 104-35 ]
.
D2 Granting an option	when option is granted	capital proceeds from grant less expenditure to grant it	expenditure to grant option less capital proceeds
[ See section 104-40 ]
.
D3 Granting a right to income from mining	when contract is entered into or, if none, when right is granted	capital proceeds from grant of right less expenditure to grant it	expenditure to grant right less capital proceeds
[ See section 104-45 ]
.
D4 Entering into a conservation covenant	when covenant is entered into	capital proceeds from covenant less cost base apportioned to the covenant	reduced cost base apportioned to the covenant less capital proceeds from covenant
[ See section 104-47 ]
.
E1 Creating a trust over a CGT asset	when trust is created	capital proceeds from creating trust less asset ' s cost base	asset ' s reduced cost base less capital proceeds
[ See section 104-55 ]
.
E2 Transferring a CGT asset to a trust	when asset transferred	capital proceeds from transfer less asset ' s cost base	asset ' s reduced cost base less capital proceeds
[ See section 104-60 ]
.
E3 Converting a trust to a unit trust	when trust is converted	market value of asset at that time less its cost base	asset ' s reduced cost base less that market value
[ See section 104-65 ]
.
E4 Capital payment for trust interest	when trustee makes payment	non-assessable part of the payment less cost base of the trust interest	no capital loss
[ See section 104-70 ]
.
E5 Beneficiary becoming entitled to a trust asset	when beneficiary becomes absolutely entitled	for trustee - market value of CGT asset at that time less its cost base; for beneficiary - that market value less cost base of beneficiary ' s capital interest	for trustee - reduced cost base of CGT asset at that time less that market value; for beneficiary - reduced cost base of beneficiary ' s capital interest less that market value
[ See section 104-75 ]
.
E6 Disposal to beneficiary to end income right	the time of the disposal	for trustee - market value of CGT asset at that time less its cost base; for beneficiary - that market value less cost base of beneficiary ' s right to income	for trustee - reduced cost base of CGT asset at that time less that market value; for beneficiary - reduced cost base of beneficiary ' s right to income less that market value
[ See section 104-80 ]
.
E7 Disposal to beneficiary to end capital interest	the time of the disposal	for trustee - market value of CGT asset at that time less its cost base; for beneficiary - that market value less cost base of beneficiary ' s capital interest	for trustee - reduced cost base of CGT asset at that time less that market value; for beneficiary - reduced cost base of beneficiary ' s capital interest less that market value
[ See section 104-85 ]
.
E8 Disposal by beneficiary of capital interest	when disposal contract entered into or, if none, when beneficiary ceases to own CGT asset	capital proceeds less appropriate proportion of the trust ' s net assets	appropriate proportion of the trusts ' s net assets less capital proceeds
[ See section 104-90 ]
.
E9 Creating a trust over future property	when entity makes agreement	market value of the property (as if it existed when agreement made) less incidental costs in making agreement	incidental costs in making agreement less market value of the property (as if it existed when agreement made)
[ See section 104-105 ]
.
E10 Annual cost base reduction exceeds cost base of interest in AMIT	when reduction happens	excess of cost base reduction over cost base	no capital loss
[See section 104-107A]
.
F1 Granting a lease	for grant of lease - when entity enters into lease contract or, if none, at start of lease; for lease renewal or extension - at start of renewal or extension	capital proceeds less expenditure on grant, renewal or extension	expenditure on grant, renewal or extension less capital proceeds
[ See section 104-110 ]
.
F2 Granting a long term lease	for grant of lease - when lessor grants lease; for lease renewal or extension - at start of renewal or extension	capital proceeds from grant, renewal or extension less cost base of leased property	reduced cost base of leased property less capital proceeds from grant, renewal or extension
[ See section 104-115 ]
.
F3 Lessor pays lessee to get lease changed	when lease term is varied or waived	no capital gain	amount of expenditure to get lessee ' s agreement
[ See section 104-120 ]
.
F4 Lessee receives payment for changing lease	when lease term is varied or waived	capital proceeds less cost base of lease	no capital loss
[ See section 104-125 ]
.
F5 Lessor receives payment for changing lease	when lease term is varied or waived	capital proceeds less expenditure in relation to variation or waiver	expenditure in relation to variation or waiver less capital proceeds
[ See section 104-130 ]
.
G1 Capital payment for shares	when company pays non-assessable amount	payment less cost base of shares	no capital loss
[ See section 104-135 ]
.
G2 (Repealed by No 90 of 2002)
.
G3 Liquidator or administrator declares shares or financial instruments worthless	when declaration was made	no capital gain	shares ' or financial instruments ' reduced cost base
[ See section 104-145 ]
.
H1 Forfeiture of a deposit	when deposit is forfeited	deposit less expenditure in connection with prospective sale	expenditure in connection with prospective sale less deposit
[ See section 104-150 ]
.
H2 Receipt for event relating to a CGT asset	when act, transaction or event occurred	capital proceeds less incidental costs	incidental costs less capital proceeds
[ See section 104-155 ]
.
I1 Individual or company stops being an Australian resident	when individual or company stops being Australian resident	for each CGT asset the person owns, its market value less its cost base	for each CGT asset the person owns, its reduced cost base less its market value
[ See section 104-160 ]
.
I2 Trust stops being a resident trust	when trust ceases to be resident trust for CGT purposes	for each CGT asset the trustee owns, its market value of asset less its cost base	for each CGT asset the trustee owns, its reduced cost base less its market value
[ See section 104-170 ]
.
J1 Company stops being member of wholly-owned group after roll-over	when the company stops	market value of asset at time of event less its cost base	reduced cost base of asset less that market value
[ See section 104-175 ]
.
J2 Change in relation to replacement asset or improved asset after a roll-over under Subdivision 152-E	when the change happens	the amount mentioned in subsection 104-185(5)	no capital loss
[ See section 104-185 ]
.
J3 (Repealed by No 55 of 2007 )
.
J4 Trust fails to cease to exist after a roll-over under Subdivision 124-N	when the failure happens	market value of asset less asset ' s cost base	reduced cost base of asset less asset ' s market value
[ See section 104-195 ]
.
J5 Failure to acquire replacement asset and to incur fourth element expenditure after a roll-over under Subdivision 152-E	at the end of the replacement asset period	the amount of the capital gain that you disregarded under Subdivision 152-E	no capital loss
[ See section 104-197 ]
.
J6 Cost of acquisition of replacement asset or amount of fourth element expenditure, or both, not sufficient to cover disregarded capital gain	at the end of the replacement asset period	the amount mentioned in subsection 104-198(3)	no capital loss
[ See section 104-198 ]
.
K1 As the result of an incoming international transfer of a Kyoto unit or an Australian carbon credit unit from your foreign account or your nominee ' s foreign account, you start to hold the unit as a registered emissions unit [See section 104-205]	when you start to hold the unit as a registered emissions unit	market value of unit less its cost base	reduced cost base of unit less its market value
.
K2 Bankrupt pays amount in relation to debt	when payment is made	no capital gain	so much of payment as relates to denied part of a net capital loss
[ See section 104-210 ]
.
K3 Asset passing to tax-advantaged entity	when individual dies	market value of asset at death less its cost base	reduced cost base of asset less that market value
[ See section 104-215 ]
.
K4 CGT asset starts being trading stock	when asset starts being trading stock	market value of asset less its cost base	reduced cost base of asset less its market value
[ See section 104-220 ]
.
K5 Special capital loss from collectable that has fallen in market value	when CGT event A1, C2 or E8 happens to shares in the company, or an interest in the trust, that owns the collectable	no capital gain	market value of the shares or interest (as if the collectable had not fallen in market value) less the capital proceeds from CGT event A1, C2 or E8
[ See section 104-225 ]
.
K6 Pre-CGT shares or trust interest	when another CGT event involving the shares or interest happens	capital proceeds from the shares or trust interest (so far as attributable to post-CGT assets owned by the company or trust) less the assets ' cost bases	no capital loss
[ See section 104-230 ]
.
K7 Balancing adjustment occurs for a depreciating asset that you used for purposes other than taxable purposes	When balancing adjustment event occurs	Termination value less cost times fraction	Cost less termination value times fraction
[ See section 104-235 ]
.
K8 Direct value shifts affecting your equity or loan interests in a company or trust	the decrease time for the interests	the gain worked out under section 725-365	no capital loss
[ See section 104-250 and Division 725 ]
.
K9 Entitlement to receive payment of a carried interest	when you become entitled to receive payment	capital proceeds from entitlement	no capital loss
[ See section 104-255 ]
.
K10 You make a forex realisation gain covered by item 1 of the table in subsection 775-70(1)	when the forex realisation event happens	the forex realisation gain	no capital loss
[ See section 104-260 ]
.
K11 You make a forex realisation loss covered by item 1 of the table in subsection 775-75(1)	when the forex realisation event happens	no capital gain	the forex realisation loss
[ See section 104-265 ]
.
K12 Foreign hybrid loss exposure adjustment	just before the end of the income year	no capital gain	the amount stated in subsection 104-270(3)
[ See section 104-270 ]
.
L1 Reduction under section 705-57 in tax cost setting amount of assets of entity becoming subsidiary member of consolidated group or MEC group	Just after entity becomes subsidiary member	no capital gain	amount of reduction
[ See section 104-500 ]
.
L2 Amount remaining after step 3A etc. of joining allocable cost amount is negative	Just after entity becomes subsidiary member	amount remaining	no capital loss
[ See section 104-505 ]
.
L3 Tax cost setting amounts for retained cost base assets exceed joining allocable cost amount	Just after entity becomes subsidiary member	amount of excess	no capital loss
[ See section 104-510 ]
.
L4 No reset cost base assets against which to apply excess of net allocable cost amount on joining	Just after entity becomes subsidiary member	no capital gain	amount of excess
[ See section 104-515 ]
.
L5 Amount remaining after step 4 of leaving allocable cost amount is negative	When entity ceases to be subsidiary member	amount remaining	no capital loss
[ See section 104-520 ]
.
L6 Error in calculation of tax cost setting amount for joining entity ' s assets: CGT event L6	start of the income year when the Commissioner becomes aware of the errors	the net overstated amount resulting from the errors, or a portion of that amount	the net understated amount resulting from the errors, or a portion of that amount
[ See section 104-525 ]
.
L7 (Repealed by No 56 of 2010)
.
L8 Reduction in tax cost setting amount for reset cost base assets on joining cannot be allocated	Just after entity becomes subsidiary member	no capital gain	amount of reduction that cannot be allocated
[ See section 104-535 ]

Note:

Subsection 230-310(4) (which deals with hedging financial arrangements) provides that in certain circumstances a CGT event is taken to have occurred in relation to a hedging financial arrangement at the same time as a CGT event actually occurs in relation to a hedged item covered by the arrangement.

View history note

History

S 104-5 amended by No 53 of 2016, s 3 and Sch 2 item 1, by inserting table item dealing with CGT event E10, effective 5 May 2016. For application provision, see note under Div 276 heading.

S 104-5 amended by No 70 of 2015, s 3 and Sch 6 item 29, by substituting " Kyoto unit or an Australian carbon credit unit " for " *Kyoto unit or an *Australian carbon credit unit " in cell at table item dealing with CGT event K1, column headed " Event number and description " , effective 25 June 2015.

S 104-5 amended by No 83 of 2014, s 3 and Sch 1 item 158, by substituting " *Kyoto unit " for " *carbon unit, an *international emissions unit " in table item relating to CGT event K1, column headed " Event number and description " , effective 1 July 2014. For application provision see note under s 26-18 .

S 104-5 amended by No 132 of 2011, s 3 and Sch 2 item 14, by inserting the table item relating to CGT event K1, effective 2 April 2012.

S 104-5 amended by No 56 of 2010, s 3 and Sch 5 item 127, by repealing the table item relating to CGT event L7. No 56 of 2010, s 3 and Sch 5 item 131 contains the following application provision:

Application provision
(1)
The amendments made by this Part apply on and after 1 July 2002.

(2)
However, the amendment does not apply in relation to a CGT event that:

(a) is CGT event L7; and

(b) happens before the day on which the Bill that became this Act was introduced into the House of Representatives; and

(c) gives rise to a capital loss.

The table item relating to CGT event L7 formerly read:

L7 Discharged amount of liability differs from amount for allocable cost amount purposes: CGT event L7 ... start of the income year in which the liability is realised ... your allocable cost amount less what it would have been had you used the correct amount for the liability ... what your allocable cost amount would have been had you used the correct amount for the liability less your allocable cost amount ... [ See section 104-530 ]

S 104-5 amended by No 15 of 2009 , s 3 and Sch 1 item 70, by inserting the note at the end, effective 26 March 2009. For application and transitional provisions see note under Div 230 heading.

S 104-5 (table) amended by No 55 of 2007 , s 3 and Sch 1 items 8 to 10, by substituting the item dealing with CGT event J2, repealing the item dealing with CGT event J3 and inserting the items dealing with CGT events J5 and J6, applicable to CGT events happening in the 2006-07 income year or later income years. The items dealing with CGT events J2 and J3 formerly read:

J2 Change in status of a CGT asset that was a replacement asset in a roll-over under Subdivision 152-E ... when the change in status happens ... the amount of the capital gain that you disregarded under Subdivision 152-E ... no capital loss ... [ See section 104-185 ]

J3 A change happens in circumstances where a share in a company or an interest in a trust was a replacement asset in a roll-over under Subdivision 152-E ... when the change in circumstances happens ... the amount of the capital gain that you disregarded under Subdivision 152-E ... no capital loss ... [ See section 104-190 ]

S 104-5 (table) amended by No 41 of 2005, No 23 of 2005, No 101 of 2004, No 133 of 2003, No 107 of 2003, No 16 of 2003, No 136 or 2002, No 117 of 2002, No 90 of 2002, No 53 of 2002, No 167 of 2001, No 77 of 2001, No 165 of 1999 and No 94 of 1999.

S 104-5 inserted by No 46 of 1998.

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