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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.