Commonwealth Consolidated Acts Commonwealth Consolidated ActsConsequences for capital proceeds
(1) If * CGT event A1 happens because you * dispose of a * CGT asset, your * capital proceeds from the disposal:
(a) do not include the value of any * look - through earnout right relating to the CGT asset and the disposal; and
(b) are increased by any * financial benefit that you receive under such a look - through earnout right; and
(c) are reduced by any financial benefit that you provide under such a look - through earnout right.
Remaking choices affected by the look - through earnout right
(2) Despite section 103 - 25, you may remake any choice you made under this Part or Part 3 - 3 in relation to the * CGT event if:
(a) you provide or receive a * financial benefit under such a * look - through earnout right; and
(b) you remake the choice at or before the time you are required to lodge your * income tax return for the income year in which the financial benefit is provided or received.
Amending assessments affected by the look - through earnout right
(3) The Commissioner may amend an assessment of a * tax - related liability if:
(a) an entity provides or receives a * financial benefit under such a * look - through earnout right; and
(b) the amount of the tax - related liability:
(i) depends on that entity's taxable income for the income year in which the * CGT event happens; or
(ii) is otherwise affected by that right's character as a look - through earnout right; and
(c) the Commissioner makes the amendment before the end of the 4 - year period starting at the end of the income year in which the last possible financial benefit becomes or could become due under the look - through earnout right.
The tax - related liability need not be a liability of that entity.
Note: Subparagraph (b)(ii) covers changes to the amount of that tax - related liability that happen directly or indirectly because of subsection (1) or (2).
(4) If at a particular time a right is taken never to have been a * look - through earnout right because of subsection 118 - 565(2), the Commissioner may amend an assessment of a * tax - related liability for up to 4 years after that time if:
(a) an entity provides or receives a * financial benefit under the right; and
(b) the amount of the tax - related liability:
(i) depends on that entity's taxable income for the income year in which the * CGT event happens; or
(ii) was otherwise affected by that right's character as a look - through earnout right before subsection 118 - 565(2) applied.
The tax - related liability need not be a liability of that entity.
Note: Subsection 118 - 565(2) restricts look - through earnout rights to rights to financial benefits over a period not exceeding 5 years from the end of the income year in which the CGT event happens.
(5) If, after providing or receiving a * financial benefit under a right referred to in subsection (3) or (4):
(a) you are dissatisfied with an assessment referred to in that subsection; and
(b) the Commissioner notifies you that the Commissioner has decided under that subsection not to amend your assessment;
you may object against the assessment, to the extent that it does not take account of that right's character (as a * look - through earnout right or not such a right), in the manner set out in Part IVC of the Taxation Administration Act 1953 .
Table of Subdivisions
Guide to Division 118
118 - A General exemptions
118 - B Main residence
118 - D Insurance and superannuation
118 - E Units in pooled superannuation trusts
118 - F Venture capital investment
118 - G Venture capital: investment by superannuation funds for foreign residents
118 - H Demutualisation of Tower Corporation
118 - I Look - through earnout rights