Table of sections
118-250 Exempting part of a capital gain attributable to goodwill
(1) If there is a change in the ownership of a
*business of an entity (the primary business) or its interest in it or that business or interest ends, and the entity makes a *capital gain attributable to the goodwill of the primary business, half of the capital gain is disregarded.(2) However, that part of the
*capital gain is disregarded only if the sum of:(a) the
(b) the values of your interests in the net value of the primary business and the net values of
*businesses that are *related businesses at that time;is less than the *business exemption threshold for the income year in which the *CGT event occurred.
(3) A *business is a related business of the primary business if it is carried on by:
(a) the individual who carries on the primary business; or
(b) the company that carries on the primary business or by a company that is a member of the same *wholly-owned group.
(a) the first trust; or
(b) another trust having the same trustee and a common beneficiary or common potential beneficiary; or
(c) any other trust having the same trustee where:
(i) the other trust is one of a series of trusts that includes the first trust; and
(ii) each trust in the series is linked to at least one other trust in the series by having a common beneficiary or common potential beneficiary.
Section 118-250 does not apply, and is taken never to have applied, to the goodwill if the entity makes an election for the goodwill under subsection 160ZZPQ(1) of the Income Tax Assessment Act 1936 (about roll-overs for the assets of small
*businesses).118-260 Meaning of business exemption threshold
(1) The business exemption threshold for the 1997-98 income year is $2,248,000.
(2) The
*business exemption threshold is indexed annually, but the result of the indexation is rounded upwards to the nearest multiple of 1,000.Note: Subdivision 960-M shows you how to index amounts.
(3) The Commissioner must publish before the beginning of each
*financial year the *business exemption threshold for that year.Subdivision 118-D—Insurance and superannuation
Table of sections
(1) A
*capital gain or *capital loss you make from a *CGT event happening in relation to a *CGT asset that is your interest in rights under a *general insurance policy, a *life insurance policy or an *annuity instrument is disregarded in the situations set out in this table.
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Insurance policies |
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The *CGT event happens to this type of policy: |
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1 |
Any insurance policy or *annuity instrument |
the insurer or the entity that issued the instrument |
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2 |
A *general insurance policy for property where, if a *CGT event happened in relation to the property, any *capital gain or *capital loss would be disregarded |
the insured |
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3 |
A *life insurance policy or an *annuity instrument |
the original beneficial owner of the policy or instrument |
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4 |
A *life insurance policy or an *annuity instrument |
an entity that *acquired the interest in the policy or instrument for no consideration |
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5 |
A *life insurance policy or an *annuity instrument |
the trustee of: (a) a (b) a *complying approved deposit fund; or(c) a *pooled superannuation trust;for the income year in which the *CGT event happened |
Example 1: Brian (as the insured) receives an insurance payment from his insurer for the destruction of a building he owned as an investment. The payment constitutes capital proceeds on the destruction (CGT event C1). The discharge of the insurance policy (CGT event C2) has no CGT consequences.
Example 2: Peter is the original beneficial owner of the rights under a life insurance policy. He transfers the rights to his spouse for nothing. There are no CGT consequences for him, and none for his spouse if he dies.
Note: The full list of CGT events is in section 104-5.
(1) A
*capital gain or *capital loss you make from a *CGT event happening in relation to a right to, or any part of, an asset of, or an allowance, annuity or capital amount payable out of, a *superannuation fund or an *approved deposit fund is disregarded.Example: Angela retires from her employment and receives a lump sum payment from her superannuation fund. This is an example of CGT event C2 (her rights to receive the payment ending). There are no CGT consequences for Angela.
(2) However, this exemption is not available if:
(a) you are the trustee of the fund and a
(b) an entity receives a payment or property where:
(i) the entity was not a member of the fund; and
(ii) the entity
A
*capital gain or *capital loss you make from a *CGT event happening in relation to a right to, or any part of, an *RSA is disregarded.Subdivision 118-E—Units in pooled superannuation trusts
118-350 Units in pooled superannuation trusts
(1) A
*capital gain or *capital loss an entity makes from a *CGT event happening in relation to a unit in a unit trust is disregarded if:(a) the trust is a
(b) one of the conditions in subsection (2) is satisfied.
(2) The entity must be:
(a) the trustee of a
(b) a
*life insurance entity and, just before the event happened, the unit must have been included in a *tax advantaged insurance fund of the entity; or(c) a
*registered organisation and, just before the event happened, the unit must have been owned by the entity solely for *tax-advantaged business of the entity.
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