Income Tax Assessment Act 1997

For indexation of amounts on an annual basis, the indexation factor is:

However, for indexation of the amounts mentioned in the provisions listed at items 5, 6 and 7 in section 960‑265, the indexation factor is:

For indexation under subsection 110‑36(1A) of the *cost base of a *CGT asset (except the first element of the cost base of an asset covered by subsection (3)), the indexation factor for expenditure:

in an element of the cost base; and

incurred on or after 1 July 2027;

This includes expenditure taken to have been incurred on 1 July 2027 as mentioned in paragraph 112‑155(2)(b), 112‑165(2)(b) or 112‑175(2)(b).

There are rules affecting when the expenditure was incurred: see Division 114.

For indexation under subsection 110‑36(1A) of the first element of the *cost base of a *CGT asset that is a *share in a company, or unit in a unit trust, the indexation factor for an amount in that first element that was paid to the company or trust at a time:

after the asset was *acquired; and

on or after 1 July 2027;

Peter acquires shares in a company. The shares are partly‑paid, and the company makes a call on the shares. Peter sells the shares to Narina before Peter is liable to pay the call.

For indexation under subsection 110‑36(1) of the *cost base of a *CGT asset (except the first element of the cost base of an asset covered by subsection (3)), the indexation factor for expenditure in an element of the cost base is:

This rule does not apply to expenditure incurred after 11.45 am on 21 September 1999 or any expenditure relating to a CGT asset acquired after that time: see section 114‑1.

This rule applies even if you do not actually pay some of the expenditure until a later time (for example, under a contract to purchase an asset by instalments).

There are rules affecting when the expenditure was incurred: see sections 114‑15 and 114‑20.

For indexation under subsection 110‑36(1) of the first element of the *cost base of a *CGT asset that is:

a *share in a company; or

a unit in a unit trust;

Peter acquires shares in a company. The shares are partly‑paid, and the company makes a call on the shares. Peter sells the shares to Narina before he is liable to pay the call.

This subsection does not apply to shares or units you acquired before 16 August 1989: see section 960‑275 of the Income Tax (Transitional Provisions) Act 1997.

This subsection does not apply to an amount paid after 11.45 am on 21 September 1999 or an amount paid in relation to a CGT asset acquired after that time: see section 114‑1.

However, you cannot index expenditure in the third element of the *cost base of a CGT asset (costs of ownership).

You work out the *indexation factor to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

If the factor is 1.102795, it would be rounded up to 1.103.

This section does not apply in relation to amounts mentioned in the provisions listed at items 8 to 12, or at item 14, in section 960‑265.

For the indexation of those amounts, see sections 960‑285 and 960‑290.