Commonwealth of Australia Consolidated Acts Commonwealth of Australia Consolidated ActsMeaning of net value of the CGT assets
(1) The net value of the CGT assets of an entity is the amount (whether positive, negative or nil) obtained by subtracting from the sum of the * market values of those assets the sum of:
(a) the liabilities of the entity that are related to the assets; and
(b) the following provisions made by the entity:
(i) provisions for annual leave;
(ii) provisions for long service leave;
(iii) provisions for unearned income;
(iv) provisions for tax liabilities.
Assets to be disregarded
(2) In working out the net value of the CGT assets of an entity:
(a) disregard * shares, units or other interests (except debt) in another entity that is * connected with the first-mentioned entity or with an * affiliate of the first-mentioned entity, but include any liabilities related to any such shares, units or interests; and
(b) if the entity is an individual, disregard:
(i) assets being used solely for the personal use and enjoyment of the individual, or the individual's * affiliate (except a * dwelling, or an * ownership interest in a dwelling, that is the individual's main residence, including any adjacent land to which the main residence exemption can extend because of section 118-120); and
(ii) except for an amount included under subsection (2A), the * market value of a dwelling, or an ownership interest in a dwelling, that is the individual's main residence (including any relevant adjacent land); and
(iii) a right to, or to any part of, any allowance, annuity or capital amount payable out of a * superannuation fund or an * approved deposit fund; and
(iv) a right to, or to any part of, an asset of a superannuation fund or of an approved deposit fund; and
(v) a policy of insurance on the life of an individual.
Note: The meaning of connected with is affected by section 152-78.
(2A) In working out the net value of the CGT assets of an individual, if:
(a) a * dwelling of the individual, an * ownership interest in such a dwelling or any relevant adjacent land, was used, during all or part of the * ownership period of the dwelling, by the individual to produce assessable income to a particular extent; and
(b) the individual satisfied paragraph 118-190(1)(c) (about interest deductibility) at least to some extent;
include such amount as is reasonable having regard to the extent to which that paragraph was satisfied.
Note: The net value of the CGT assets of the individual will be reduced by the same proportion of the individual's liabilities related to the dwelling, ownership interest or adjacent land.
Net value of the CGT assets of others
(3) In working out the net value of the CGT assets of:
(a) your * affiliate; or
(b) an entity that is * connected with your affiliate;
include only those assets that are used, or held ready for use, in the carrying on of a * business by you or another entity * connected with you (whether the business is carried on alone or jointly with others).
Note: The meaning of connected with is affected by section 152-78.
(4) However, disregard assets under subsection (3) that are used, or held ready for use, in the carrying on of a * business by an entity that is * connected with you only because of your * affiliate.
Example: You and your husband sell a florist's business that you jointly carry on. Your husband also wholly owns a company that carries on a newsagency business. You yourself have no other involvement with the newsagency business.
Under subsection (4), you disregard the newsagency company's assets in working out whether you satisfy the maximum net asset value test because, although the company is "connected" with you, it is so connected only because of your affiliate (your husband).
Note: The meaning of connected with is affected by section 152-78.