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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

History

Pt 3-1 inserted by No 46 of 1998.

Division 110 - Cost base and reduced cost base  

History

Div 110 inserted by No 46 of 1998.

Subdivision 110-A - Cost base  

SECTION 110-35  Incidental costs  

 ITAA 36

110-35(1)  

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There are a number of incidental costs you may have incurred. Except for the ninth , they are costs you may have incurred:


(a) to *acquire a *CGT asset; or


(b) that relate to a *CGT event.

History

S 110-35(1) substituted by No 32 of 2006, s 3 and Sch 2 item 39, applicable to CGT events happening on or after 1 July 2005. S 110-35(1) formerly read:


110-35(1) There are 5 incidental costs you may have incurred:


(a) to *acquire a *CGT asset; or


(b) that relate to a *CGT event.

110-35(2)  

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The first is remuneration for the services of a surveyor, valuer, auctioneer, accountant, broker, *agent, consultant or legal adviser. However, remuneration for professional advice about the operation of this Act is not included unless it is provided by a *recognised tax adviser.

Note:

Expenditure for professional advice about taxation incurred before 1 July 1989 does not form part of the cost base of a CGT asset: see section 110-35 of the Income Tax (Transitional Provisions) Act 1997 .

History

S 110-35(2) amended by No 94 of 1999.

110-35(3)  

The second is costs of transfer.

110-35(4)  

The third is stamp duty or other similar duty.

110-35(5)  

The fourth is:


(a) if you *acquired a *CGT asset - costs of advertising or marketing to find a seller; or
 View history reference


(b) if a *CGT event happened - costs of advertising or marketing to find a buyer.
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History

S 110-35(5) amended by No 32 of 2006, s 3 and Sch 2 item 40, by inserting " or marketing " after " advertising " in paras (a) and (b), applicable to CGT events happening on or after 1 July 2005.

110-35(6)  

The fifth is costs relating to the making of any valuation or apportionment for the purposes of this Part or Part 3-3.

110-35(7)  

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The sixth is search fees relating to a *CGT asset.

History

S 110-35(7) inserted by No 32 of 2006, s 3 and Sch 2 item 41, applicable to CGT events happening on or after 1 July 2005.

110-35(8)  

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The seventh is the cost of a conveyancing kit (or a similar cost).

History

S 110-35(8) inserted by No 32 of 2006, s 3 and Sch 2 item 41, applicable to CGT events happening on or after 1 July 2005.

110-35(9)  

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The eighth is borrowing expenses (such as loan application fees and mortgage discharge fees).

History

S 110-35(9) inserted by No 32 of 2006, s 3 and Sch 2 item 41, applicable to CGT events happening on or after 1 July 2005.

110-35(10)  

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The ninth is expenditure that:


(a) is incurred by the *head company of a *consolidated group or *MEC group to an entity that is not a *member of the group; and
 View history reference


(b) reasonably relates to a *CGT asset *held by the head company; and


(c) is incurred because of a transaction that is between members of the group.

Example:

Land is transferred by one company to another company. The companies are members of a consolidated group. Stamp duty is payable as a result of the transaction.

The transaction has no taxation consequences because of its intra-group nature.

The stamp duty is included in the cost base and reduced cost base of the land.

Note:

Intra-group assets are not held by the head company because of the operation of subsection 701-1(1) (the single entity rule). An example of an intra-group asset is a debt owed by a member of the consolidated group to another member of the group.

History

S 110-35(10) amended by No 56 of 2010, s 3 and Sch 5 item 135, by inserting " or *MEC group " after " a *consolidated group " in para (a), applicable to CGT events happening on or after 1 July 2005.

S 110-35(10) inserted by No 32 of 2006, s 3 and Sch 2 item 41, applicable to CGT events happening on or after 1 July 2005.

110-35(11)  

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The tenth is termination or other similar fees incurred as a direct result of your ownership of a *CGT asset ending.

History

S 110-35(11) inserted by No 136 of 2010 , s 3 and Sch 2 item 8, applicable to CGT events happening on or after 1 July 2008. No 136 of 2010 , s 3 and Sch 2 item 12 also contains the following transitional provision:

Transitional provision - termination fees  
(1) Subsection 110-35(11) of the Income Tax Assessment Act 1997 , as inserted, does not apply to you if:


(a) your ownership of the CGT asset ended:


(i) after 1 July 2008; and

(ii) before the start of 7 December 2010; and


(b) you choose that those provisions do not apply to you.
(2) A choice under subitem (1) must be made by the later of:


(a) 12 months after 7 December 2010; and


(b) the time within which the Commissioner may, under section 170 of the Income Tax Assessment Act 1936 , amend your assessment for the income year in which your ownership of the CGT asset ended.

S 110-35 inserted by No 46 of 1998.


 



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