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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 106 - Entity making the gain or loss  

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.

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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