CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-3
-
CAPITAL GAINS AND LOSSES: SPECIAL TOPICS
History
Part 3-3 inserted by No 46 of 1998.
Division 152
-
Small business relief
History
Div 152 inserted by No 165 of 1999 (as amended by No 173 of 2000).
Subdivision 152-D
-
Small business retirement exemption
SECTION 152-325
Company or trust conditions
Company or trust to make payments
152-325(1)
A company or trust must make a payment (whether directly or indirectly through one or more interposed entities) to at least one of its *CGT concession stakeholders if:
(a)
the company or trust makes a choice under this Subdivision to disregard a *capital gain from *CGT event J2, J5 or J6; or
(b)
the company or trust receives an amount of *capital proceeds from a *CGT event for which it makes a choice under this Subdivision.
History
S 152-325(1) amended by No 42 of 2009, s 3 and Sch 2 item 37, by inserting
"
(whether directly or indirectly through one or more interposed entities)
"
after
"
payment
"
, applicable to payments that are made (whether by a company or trust to comply with section
152-325
of the
Income Tax Assessment Act 1997
or by an interposed entity) on or after 23 June 2009. For transitional provision relating to choice, see note under s
152-10(1)
.
152-325(2)
If the company or trust receives the *capital proceeds from the CGT event in instalments, subsection (1) applies to each instalment in succession (up to the relevant *CGT exempt amount).
152-325(2A)
For the purposes of (but without limiting) subsection (2), the company or trust is treated as receiving the *capital proceeds in instalments if:
(a)
the *CGT event happened because the company or trust *disposed of the *CGT asset; and
(b)
the capital proceeds from the disposal are increased by one or more *financial benefits that the company or trust receives under a *look-through earnout right.
History
S 152-325(2A) inserted by No 10 of 2016, s 3 and Sch 1 item 16, applicable in relation to look-through earnout rights created on or after 24 April 2015. For transitional provision, see note under Subdiv
118-I
heading.
Amount and timing of payments
152-325(3)
If a payment is made to more than one *CGT concession stakeholder, the amount of each such payment is to be worked out by reference to each individual
'
s percentage (see subsection
152-315(5)
) of the relevant *CGT exempt amount.
152-325(3A)
If the *CGT concession stakeholder to whom the payment is made is an employee of the company or trust, the payment must not be of a kind mentioned in section
82-135
(disregarding paragraph (fa) of that section).
History
S 152-325(3A) inserted by No 15 of 2007, s 3 and Sch 2 item 7. Act
No 143 of 2007
, s 3 and Sch 5 item 28 substitutes the application of this amendment with the following:
(1)
The amendments apply to:
(a)
individuals who:
(i)
make the choice referred to in subsection
152-305(1)
of the
Income Tax Assessment Act 1997
; or
(ii)
receive capital proceeds from a CGT event; and
(b)
companies or trusts that make a payment referred to in section
152-325
of the
Income Tax Assessment Act 1997
;
after 30 June 2007, regardless of when the relevant CGT event happened.
152-325(4)
The payment must be made by:
(a)
if paragraph (1)(a) applies
-
7 days after the company or trust makes the choice; and
(b)
otherwise
-
the later of:
(i)
7 days after the company or trust makes the choice; and
(ii)
7 days after the company or trust receives an amount of *capital proceeds from the *CGT event.
152-325(5)
The amount of the payment, or the sum of the amounts of the payments, required to be made under this section must be equal to the lesser of:
(a)
either:
(i)
if paragraph (1)(a) applies
-
the amount of the *capital gain from the *CGT event that the company or trust disregarded; or
(ii)
otherwise
-
the amount of *capital proceeds received; and
(b)
the relevant *CGT exempt amount.
Payments may be joint or separate
152-325(6)
If this section requires the company or trust to make 2 or more payments to a single *CGT concession stakeholder (whether or not by the same time), the company or trust may meet that requirement by making one payment or by making separate payments.
152-325(7)
If a *CGT concession stakeholder is under 55 just before a payment is made under this section in relation to him or her:
(a)
the company or trust must make the payment to the CGT concession stakeholder by contributing it for the stakeholder to a *complying superannuation fund or an *RSA in respect of the stakeholder; and
(b)
the company or trust must notify the trustee of the fund or the *RSA provider at the time the contribution is made that the contribution is made in accordance with this section.
Note:
For the non-deductibility of the contribution, see subsection
290-150(4)
.
History
S 152-325(7), (8) and (9) substituted for s 152-325(7) and (8) by No 15 of 2007, s 3 and Sch 2 item 8. Act
No 143 of 2007
, s 3 and Sch 5 item 28 substitutes the application of this amendment with the following:
(1)
The amendments apply to:
(a)
individuals who:
(i)
make the choice referred to in subsection
152-305(1)
of the
Income Tax Assessment Act 1997
; or
(ii)
receive capital proceeds from a CGT event; and
(b)
companies or trusts that make a payment referred to in section
152-325
of the
Income Tax Assessment Act 1997
;
after 30 June 2007, regardless of when the relevant CGT event happened.
S 152-325(7) formerly read:
Payment taken to be for termination of employment or ETP
152-325(7)
This Act applies to a payment as if the payment:
(a)
for a *CGT concession stakeholder who is an employee of the company or trust
-
were made in consequence of the termination of employment of the stakeholder; or
(b)
for another CGT concession stakeholder
-
were an *eligible termination payment.
Note:
For the rules about eligible termination payments, see Subdivision
AA
of Division
2
of Part
III
of the
Income Tax Assessment Act 1936
.
152-325(8)
For the purposes of Part
3-30
, treat a payment mentioned in paragraph (7)(a), made in accordance with this section, as a contribution made by the *CGT concession stakeholder.
History
S 152-325(7), (8) and (9) substituted for s 152-325(7) and (8) by No 15 of 2007, s 3 and Sch 2 item 8. Act
No 143 of 2007
, s 3 and Sch 5 item 28 substitutes the application of this amendment with the following:
(1)
The amendments apply to:
(a)
individuals who:
(i)
make the choice referred to in subsection
152-305(1)
of the
Income Tax Assessment Act 1997
; or
(ii)
receive capital proceeds from a CGT event; and
(b)
companies or trusts that make a payment referred to in section
152-325
of the
Income Tax Assessment Act 1997
;
after 30 June 2007, regardless of when the relevant CGT event happened.
S 152-325(8) formerly read:
152-325(8)
If a *CGT concession stakeholder is under 55 just before receiving a payment under this section, an amount equal to that payment must be rolled over (within the meaning of Subdivision
AA
of Division
2
of Part
III
of the
Income Tax Assessment Act 1936
) except by being paid as mentioned in paragraph
27A(12)(c)
of that Act.
Note:
Paragraph
12A(12)(c)
of the
Income Tax Assessment Act 1936
deals with payments to life companies to purchase certain annuities.
Payments are not dividends or frankable distributions
152-325(9)
Subsection (10) applies if:
(a)
a company makes a payment to comply with subsection (1) to:
(i)
a *CGT concession stakeholder; or
(ii)
an interposed entity, in relation to a CGT concession stakeholder; or
(b)
both of the following apply:
(i)
an interposed entity receives a payment (whether directly or indirectly through one or more interposed entities) that a company or trust makes to comply with subsection (1), in relation to a CGT concession stakeholder;
(ii)
the interposed entity passes on the payment to the CGT concession stakeholder or another interposed entity.
History
S 152-325(9) substituted by No 42 of 2009, s 3 and Sch 2 item 38, applicable to payments that are made (whether by a company or trust to comply with section
152-325
of the
Income Tax Assessment Act 1997
or by an interposed entity) on or after 23 June 2009. For transitional provision relating to choice, see note under s
152-10(1)
. S 152-325(9) formerly read:
152-325(9)
If:
(a)
a payment is made to a *CGT concession stakeholder in accordance with this section (disregarding section
109
of the
Income Tax Assessment Act 1936
); and
(b)
the stakeholder is an employee of the company or trust;
treat the payment, for the purposes of section
109
of that Act, as made in consequence of the termination of employment of the stakeholder.
S 152-325(7), (8) and (9) substituted for s 152-325(7) and (8) by No 15 of 2007, s 3 and Sch 2 item 8. Act
No 143 of 2007
, s 3 and Sch 5 item 28 substitutes the application of this amendment with the following:
(1)
The amendments apply to:
(a)
individuals who:
(i)
make the choice referred to in subsection
152-305(1)
of the
Income Tax Assessment Act 1997
; or
(ii)
receive capital proceeds from a CGT event; and
(b)
companies or trusts that make a payment referred to in section
152-325
of the
Income Tax Assessment Act 1997
;
after 30 June 2007, regardless of when the relevant CGT event happened.
152-325(10)
This Act applies to the payment, to the extent that it is less than or equal to the amount mentioned in subsection (3) for the stakeholder, as if:
(a)
it were not a *dividend; and
(b)
it were not a *frankable distribution.
History
S 152-325(10) inserted by No 42 of 2009, s 3 and Sch 2 item 38, applicable to payments that are made (whether by a company or trust to comply with section
152-325
of the
Income Tax Assessment Act 1997
or by an interposed entity) on or after 23 June 2009. For transitional provision relating to choice, see note under s
152-10(1)
.
152-325(11)
Subsection (10) applies in relation to the payment despite section
109
and Division
7A
of Part
III
of the
Income Tax Assessment Act 1936
.
History
S 152-325(11) inserted by No 42 of 2009, s 3 and Sch 2 item 38, applicable to payments that are made (whether by a company or trust to comply with section
152-325
of the
Income Tax Assessment Act 1997
or by an interposed entity) on or after 23 June 2009. For transitional provision relating to choice, see note under s
152-10(1)
.
S 152-325 substituted by
No 55 of 2007
, s 3 and Sch 1 item 55, applicable to CGT events happening in the 2006-07 income year or later income years. S 152-325 formerly read:
SECTION 152-325 Company or trust conditions
152-325(1)
Each time a company or trust receives an amount of *capital proceeds from a *CGT event for which it makes a choice under this Subdivision, the company or trust must make an *eligible termination payment in relation to each of its *CGT concession stakeholders.
152-325(2)
If there are 2 such stakeholders, the amount of each such *eligible termination payment is to be worked out by reference to each individual
'
s percentage (see subsection
152-315(5)
) of the relevant *CGT exempt amount.
152-325(3)
The payment must be made by the later of:
(a)
7 days after it makes the choice; and
(b)
7 days after it receives an amount of *capital proceeds from the *CGT event.
152-325(4)
In working out those *capital proceeds, disregard the *market value substitution rule (see section
116-30
).
History
S 152-325(4) substituted by No 173 of 2000.
152-325(5)
The amount of the *eligible termination payment, or the sum of the amounts of the eligible termination payments, required to be made under subsection (1) must be equal to the lesser of:
(a)
the amount of *capital proceeds received; and
(b)
the relevant *CGT exempt amount.
152-325(6)
If this section requires the company or trust to make 2 or more *eligible termination payments to a single stakeholder (whether or not by the same time), the company or trust may meet that requirement by making one payment or by making separate payments.
152-325(7)
If a stakeholder is under 55 just before receiving an *eligible termination payment under subsection (1), an amount equal to that payment must be rolled over (within the meaning of Subdivision AA of Division
2
of Part
III
of the
Income Tax Assessment Act 1936
) except by being paid as mentioned in paragraph 27A(12)(c) of that Act.
Note:
Paragraph
27A(12)(c)
of the
Income Tax Assessment Act 1936
deals with payments to life companies to purchase certain annuities.
History
S 152-325(7) amended by No 101 of 2004 and No 173 of 2000.
History
S 152-325 inserted by No 165 of 1999 (as amended by No 173 of 2000).
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