Pooled superannuation trusts using proportionate or alternative exemption method—disregard initial capital gain but recognise deferred notional gain
294-130 Pooled superannuation trusts using proportionate or alternative exemption method—disregard initial capital gain but recognise deferred notional gain
Application
This section applies in relation to a CGT asset of a pooled superannuation trust if:
section 294‑125 applies in relation to the CGT asset; and
as a result of paragraph 294‑125(3)(a), the trust makes a capital gain in respect of the asset (disregarding this section); and
the trustee of the trust makes a choice for the purposes of this paragraph in respect of the asset in accordance with subsection (2).
A choice made for the purposes of paragraph (1)(c):
is to be in the approved form; and
can only be made on or before the day by which the trustee of the trust is required to lodge the trust’s income tax return for the 2016‑17 income year; and
cannot be revoked.
Disregard initial capital gain
Disregard the capital gain mentioned in paragraph (1)(b).
Recognition of deferred notional gain
The deferred notional gain is the 2016‑17 non‑exempt proportion of the amount of the trust’s net capital gain for the 2016‑17 income year determined on the assumptions that:
subsection (3) of this section does not apply; and
the trust made no capital gains in that income year other than the gain mentioned in paragraph (1)(b); and
the trust made no capital losses in that income year; and
the trust had no previously unapplied net capital losses from earlier income years.
For the purposes of Division 102 of the Income Tax Assessment Act 1997, if a realisation event happens to the asset in an income year that starts on or after 1 July 2017:
treat the trust as having made a capital gain in that income year equal to the deferred notional gain; and
disregard section 102‑20 of that Act in respect of that capital gain; and
treat that capital gain as not being a discount capital gain.
Section 295‑400 of the Income Tax Assessment Act 1997 does not apply to the amount by which a net capital gain is increased (or comes into existence) as a result of subsection (5).
In this section:
2016‑17 non‑exempt proportion means:
unless paragraph (b) applies—1 minus the proportion mentioned in subsection 295‑400(1) of the Income Tax Assessment Act 1997; or
if the trustee has made a choice under subsection 295‑400(3) of that Act—the percentage worked out by subtracting the percentage mentioned in subsection 295‑400(4) of that Act in respect of the trust for the 2016‑17 income year from 100%.
deferred notional gain has the meaning given by subsection (4).
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