Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Despite section 118 - 407, you get only a partial exemption for a * capital gain from a * CGT event relating to an * eligible venture capital investment if:
(a) apart from this section, all of your share in the capital gain from the CGT event relating to the investment would be disregarded under section 118 - 407; and
(b) at the end of an income year to which subsection (4) applies (a valuation year ), the sum of the values of:
(i) the assets of the company or unit trust in which the investment is made; and
(ii) the assets of each other entity that is a * connected entity of the company or unit trust;
exceeds $250 million; and
(c) the CGT event happens after:
(i) if there is only one valuation year--the end of the period of 6 months after the end of that valuation year; or
(ii) if there is more than one valuation year--the end of the period of 6 months after the end of the earliest of those valuation years.
(2) If subsection (1) applies, work out your * capital gain using the formula:
where:
"normal capital gain" is what your * capital gain from the * CGT event would be apart from section 118 - 407 and this section.
"valuation year capital gain" is the capital gain you would have made in relation to the * CGT event if the CGT event had happened:
(a) if there is only one valuation year--at the end of the period of 6 months after the end of that valuation year; or
(b) if there is more than one valuation year--at the end of the period of 6 months after the end of the earliest of those valuation years.
Work out the capital gain based on what the * capital proceeds would have been, and on other matters relating to the amount of the gain being determined on a reasonable basis, if the CGT event resulting in the gain had happened at the end of that period.
(3) Despite subsection (2), you are taken not to have a * capital gain, or a * capital loss, from the * CGT event if the amount worked out under the formula in that subsection would be less than zero.
(4) This subsection applies to any income year that:
(a) precedes the income year in which the * CGT event happens; but
(b) does not precede the income year in which the investment was made.
Note: There must always be at least one valuation year, because paragraph 118 - 407(1)(d) ensures the CGT event will not happen in the year the investment was made.
(5) Section 118 - 407 does not apply in relation to a * CGT event if this section applies in relation to the CGT event.