Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 118.27

  (1)   A * capital gain or * capital loss you make:

  (a)   from a * CGT asset; or

  (b)   in creating a CGT asset; or

  (c)   from the discharge of a liability;

is disregarded if, at the time of the * CGT event, the asset or liability is, or is part of, a * Division   230 financial arrangement.

Note 1:   Paragraph   (b) is relevant for CGT event D1.

Note 2:   Paragraph   (c) is relevant for CGT event L7.

  (2)   Subsection   (1) does not apply to the following:

  (a)   a gain or loss that subsection   230 - 310(4) (which deals with hedging financial arrangements) provides is to be treated as a * capital gain or * capital loss;

  (b)   a loss that is reduced under subsection   230 - 465(2), to the extent of that reduction (this is the extent to which the loss is of a capital nature).

  (3)   Subsection   (1) does not apply if the situation that gives rise to the * CGT event does not result in a gain from the arrangement being included in your assessable income under Division   230, or in a loss from the arrangement entitling you to a deduction under Division   230.

  (4)   A * capital gain or * capital loss you make from a * CGT asset is disregarded if, at the time of the * CGT event, the asset is, or is part of, a * financial arrangement to which Subdivision   250 - E applies.