INCOME TAX ASSESSMENT ACT 1997 - SECT 116.55 Assumption of liability rule: modification 5

INCOME TAX ASSESSMENT ACT 1997 - SECT 116.55

    The * capital proceeds from a * CGT event are increased if another entity * acquires the * CGT asset (the subject of the event) subject to a liability by way of security over the asset.

    They are increased by the amount of the liability the other entity assumes.

Example:   You sell land for $150,000. You receive $50,000 (the capital proceeds) and the buyer becomes responsible for a $100,000 liability under an outstanding mortgage. The capital proceeds are increased by $100,000 to $150,000.