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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 118 - Exemptions  

Subdivision 118-A - General exemptions  

Exempt or loss-denying transactions

SECTION 118-37  Compensation, damages etc.  

 ITAA 36

118-37(1)  

A *capital gain or *capital loss you make from a *CGT event relating directly to any of these is disregarded:


(a) compensation or damages you receive for:

(i) any wrong or injury you suffer in your occupation; or

(ii) any wrong, injury or illness you or your *relative suffers personally;
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(b) compensation or damages you receive as the trustee of a trust (other than a trust that is a *complying superannuation entity) for:

(i) any wrong or injury a beneficiary of the trust suffers in his or her occupation; or

(ii) any wrong, injury or illness a beneficiary of the trust, or the beneficiary's relative, suffers personally;
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(ba) a *CGT asset you receive, as a beneficiary of a trust, from the trustee of the trust to the extent that the CGT asset is attributable to compensation or damages that the trustee receives as described in paragraph (b) for:

(i) any wrong or injury you suffer in your occupation; or

(ii) any wrong, injury or illness you or your relative suffers personally;
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(c) gambling, a game or a competition with prizes;


(d) (Repealed by No 13 of 2014)


(e) (Repealed by No 123 of 2008)
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(f) (Repealed by No 109 of 2014)
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(g) a tobacco industry exit grant that you receive under the program known as the Tobacco Growers Adjustment Assistance Programme 2006 if, as a condition of receiving the grant, you entered into an undertaking not to become the owner or operator of any agricultural *enterprise within 5 years after receiving the grant;
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(ga) a *water entitlement, to the extent that the CGT event happens because an entity *derives a *SRWUIP payment that is *non-assessable non-exempt income under section 59-65;
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(gb) a *SRWUIP payment you derive that is non-assessable non-exempt income under section 59-65;
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(h) a right or entitlement to a *tax offset, a *deduction, or a similar benefit under an *Australian law, a *foreign law or a law of part of a foreign country;
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(i) a variation, transfer or revocation of an allocation (within the meaning of the National Rental Affordability Scheme Act 2008);
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(j) anything of economic value provided to you (whether directly or indirectly, such as through an *NRAS consortium of which you are a *member) by:

(i) a Department of a State or Territory; or

(ii) a body (whether incorporated or not) established for a public purpose by or under a law of a State or Territory;
in relation to your participation in the *National Rental Affordability Scheme.
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118-37(2)  

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A *capital gain or *capital loss is disregarded if you make it as a result of receiving a payment or property as reimbursement or payment of your expenses, or receiving or using a voucher or certificate, under:


(a) a scheme established by an *Australian government agency, a *local governing body or a *foreign government agency under an enactment or an instrument of a legislative character; or
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(b) the General Practice Rural Incentives Program or the Rural and Remote General Practice Program; or


(c) the Sydney Aircraft Noise Insulation Project; or


(d) the M4/M5 Cashback Scheme; or


(e) the Unlawful Termination Assistance Scheme or the Alternative Dispute Resolution Assistance Scheme.

118-37(3)  

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A *capital gain you make from compensation you receive under the *firearms surrender arrangements is disregarded.

118-37(4)  

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A *capital gain or *capital loss you make from a payment you receive is disregarded if:


(a) you are an Australian resident; and
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(b) you receive the payment:


(i) under the program known as the "German Forced Labour Compensation Programme"; and

(ii) from the Foundation known as "Remembrance, Responsibility and Future" or any of the Foundation's partner organisations; and


(c) the payment is in the nature of compensation for:


(i) any wrong or injury; or

(ii) any loss of, or damage to, property;
that you, or another person, suffered as a result of injustices committed during the National Socialist period.

118-37(5)  

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A *capital gain or *capital loss you make as a result of receiving a payment or property is disregarded if:


(a) you are an individual who is an Australian resident; and


(b) you receive the payment or property from a source in a foreign country; and


(c) you do not receive the payment or property directly or indirectly from an *associate of yours; and


(d) the payment or property you receive is in connection with:


(i) any wrong or injury; or

(ii) any loss of, or damage to, property; or

(iii) any other detriment;
that you, or another individual, suffered as a result of:

(iv) persecution by the National Socialist regime of Germany during the National Socialist period; or

(v) persecution by any other enemy of the Commonwealth during the Second World War; or

(vi) persecution by an enemy-associated regime during the Second World War; or

(vii) flight from persecution mentioned in subparagraph (iv), (v) or (vi); or

(viii) participation in a resistance movement during the Second World War against forces of the National Socialist regime of Germany; or

(ix) participation in a resistance movement during the Second World War against forces of any other enemy of the Commonwealth.

118-37(6)  

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For the purposes of subsection (5), the duration of the Second World War includes:


(a) the period immediately before the Second World War; and


(b) the period immediately after the Second World War.

118-37(7)  

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For the purposes of subsection (5), a regime is an enemy-associated regime if, and only if, it was:


(a) in alliance with; or


(b) occupied by; or


(c) effectively controlled by; or


(d) under duress from; or


(e) surrounded by;

either or both of the following:


(f) the National Socialist regime of Germany;


(g) any other enemy of the Commonwealth.

118-37(8)  

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Subsection (5) applies to a payment or property received by the *legal personal representative of an individual in a corresponding way to the way in which that subsection would have applied if the payment or property had been received by the individual.

118-37(9)  

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Subsection (5) applies to a payment or property received by:


(a) the *legal personal representative of a deceased individual; or


(b) the trustee of a trust established by the will of a deceased individual;

in a corresponding way to the way in which that subsection would have applied if:


(c) the individual had not died; and


(d) the payment or property had been received by the individual.


 



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