INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 3 - Determination of capital gains and capital losses  

SECTION 160ZB   EXEMPTION OF CERTAIN GAINS AND LOSSES  

160ZB(1)   [Compensation or damages - personal injury, etc]  

A capital gain shall not be taken to have accrued to a taxpayer by reason of the taxpayer having obtained a sum by way of compensation or damages for any wrong or injury suffered by the taxpayer to his or her person or in his or her profession or vocation and no such wrong or injury, or proceeding instituted or other act done or transaction entered into by the taxpayer in respect of such a wrong or injury, shall be taken to have resulted in the taxpayer having incurred a capital loss.

160ZB(2)   [Betting, lottery winnings]  

A capital gain shall not be taken to have accrued to a taxpayer by reason of the taxpayer having received winnings from betting (including pool betting), a lottery or other form of gambling or a game or competition with prizes but this subsection does not apply in relation to an amount of money or other consideration received by a taxpayer as a result of the disposal of an asset obtained from betting (including pool betting), a lottery or other form of gambling or a game or competition with prizes.

160ZB(3)   [No capital loss from betting etc]  

A taxpayer shall not be taken to have incurred a capital loss as a result of any act done or transaction entered into by the taxpayer by way of betting (including pool betting) or participating in a lottery or other form of gambling or a game or competition with prizes.

160ZB(4)   [Foreign currency exchange gains]  

A capital gain, to the extent to which it is attributable to currency exchange rate fluctuations, shall not be taken to have accrued to a taxpayer as a result of a contract where the taxpayer entered into, or acquired rights arising under, the contract for the sole purpose of eliminating or reducing the risk of adverse financial consequences that might result for the taxpayer, from currency exchange rate fluctuations, in relation to:

(a) a right acquired by the taxpayer before 20 September 1985 to receive money under another contract; or

(b) a liability acquired by the taxpayer to make a payment under another contract.

160ZB(5)   [Foreign currency exchange losses]  

A capital loss, to the extent to which it is attributable to currency exchange rate fluctuations, shall not be taken to have been incurred by a taxpayer as a result of a contract where the taxpayer entered into the contract, or acquired rights arising under the contract, after 28 November 1986 for the sole purpose of eliminating or reducing the risk of adverse financial consequences that might result for the taxpayer, from currency rate fluctuations, in relation to:

(a) a right acquired by the taxpayer before 20 September 1985 to receive money under another contract; or

(b) a liability acquired by the taxpayer to make a payment under another contract.

160ZB(6)    

160ZB(7)   [Election under 1997 Act]  

When an item already owned by a taxpayer becomes trading stock of the taxpayer:

(a) a capital gain does not accrue to the taxpayer; and

(b) the taxpayer does not make a capital loss;

if the taxpayer elects under paragraph 70-30(1)(a) of the Income Tax Assessment Act 1997 to be treated as having sold the item for its cost (as worked out under that section).