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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

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

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History Pt 3-1 inserted by No 46 of 1998.

Division 106 - Entity making the gain or loss

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History Div 106 inserted by No 46 of 1998.

Subdivision 106-B - Bankruptcy and liquidation

SECTION 106-30  Effect of bankruptcy

ITAA 36

106-30(1)

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For the purposes of this Part and Part 3-3 (about capital gains and losses) and Subdivision 328-C (What is a small business entity), the vesting of the individual's *CGT assets in the trustee under the Bankruptcy Act 1966 or under a similar foreign law is ignored.

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History S 106-30(1) amended by No 119 of 2013, s 3 and Sch 1 item 12, by inserting "(about capital gains and losses) and Subdivision 328-C (What is a small business entity)" after "Part and Part 3-3", applicable: (a) to the extent the amendments affect the A New Tax System (Wine Equalisation Tax) Act 1999 - in relation to financial years commencing on or after 30 June 2013; and (b) to the extent the amendments affect Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 (about capital gains and losses) - in relation to CGT events happening on or after 30 June 2013; and (c) otherwise - in relation to income years commencing on or after 30 June 2013. An entity may choose to have the amendments also apply, in relation to the entity: (a) to the extent the amendments affect Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 - in relation to CGT events happening during the 2008-09 income year and later income years; and (b) other than to the extent the amendments affect those Parts or the A New Tax System (Wine Equalisation Tax) Act 1999 - in relation to the 2008-09 income year and later income years.

106-30(2)

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This Part, Part 3-3 and Subdivision 328-C apply to an act done in relation to a *CGT asset of an individual in these circumstances as if the act had been done by the individual (instead of by the trustee etc.):

(a) as a result of the bankruptcy of the individual by the Official Trustee in Bankruptcy or a registered trustee, or the holder of a similar office under a *foreign law;

(b) by a trustee under a personal insolvency agreement made under Part X of the Bankruptcy Act 1966, or under a similar instrument under a foreign law;

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(c) by a trustee as a result of an arrangement with creditors under that Act or a foreign law.

Example:

A CGT asset of an individual vests in a trustee because of the bankruptcy of the individual. No CGT event happens as a result of the vesting.

The trustee later sells the CGT asset. Any capital gain or loss is made by the individual, not the trustee.

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History S 106-30(2) amended by No 119 of 2013, s 3 and Sch 1 items 13 to 15, by substituting "Part, Part 3-3 and Subdivision 328-C" for "Part and Part 3-3", substituting "the act had been done by the individual (instead of by the trustee etc.)" for "it had been done by the individual" and inserting the example at the end, applicable: (a) to the extent the amendments affect the A New Tax System (Wine Equalisation Tax) Act 1999 - in relation to financial years commencing on or after 30 June 2013; and (b) to the extent the amendments affect Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 (about capital gains and losses) - in relation to CGT events happening on or after 30 June 2013; and (c) otherwise - in relation to income years commencing on or after 30 June 2013. An entity may choose to have the amendments also apply, in relation to the entity: (a) to the extent the amendments affect Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997 - in relation to CGT events happening during the 2008-09 income year and later income years; and (b) other than to the extent the amendments affect those Parts or the A New Tax System (Wine Equalisation Tax) Act 1999 - in relation to the 2008-09 income year and later income years. S 106-30(2) amended by No 80 of 2004. S 106-30 inserted by No 46 of 1998.