Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 (15 of 2009)

Schedule 1   Amendments

Part 2   Consequential amendments

Income Tax Assessment Act 1997

76   Section 118-27

Repeal the section, substitute:

118-27 Division 230 financial arrangements

(1) A *capital gain or *capital loss you make:

(a) from a *CGT asset; or

(b) in creating a CGT asset; or

(c) from the discharge of a liability;

is disregarded if, at the time of the *CGT event, the asset or liability is, or is part of, a *Division 230 financial arrangement.

Note 1: Paragraph (b) is relevant for CGT event D1.

Note 2: Paragraph (c) is relevant for CGT event L7.

(2) Subsection (1) does not apply to the following:

(a) a gain or loss that subsection 230-310(4) (which deals with hedging financial arrangements) provides is to be treated as a *capital gain or *capital loss;

(b) a loss that is reduced under subsection 230-465(2), to the extent of that reduction (this is the extent to which the loss is of a capital nature).

(3) Subsection (1) does not apply if the situation that gives rise to the *CGT event does not result in a gain from the arrangement being included in your assessable income under Division 230, or in a loss from the arrangement entitling you to a deduction under Division 230.