vi Contents Preface iii Abbreviations v Chapter 1: Eligibility checklist 1 1-100 Determining eligibility for CGT small business relief... 2 Pre-CGT asset... 4 Chapter 2: Some general CGT issues 5 2-100 Background... 6 2-105 CGT asset... 6 2-110 Pre-CGT assets... 6 2-115 Special asset rules... 7 (1) Depreciating assets... 7 (2) Trading stock... 7 2-120 The CGT events... 8 (1) Importance of the time when a CGT event happens... 8 Relevant income year...8 CGT small business reliefs...8 Commencement of amendments...8 (2) More than one CGT event potentially happens... 9 2-125 Particular CGT events... 9 (1) CGT event A1: disposal of a CGT asset... 9 (2) CGT event C2: cancellation, surrender and similar endings... 9 (3) CGT event D1: creation of contractual or other rights... 10 (4) CGT event E4: capital payment for trust interest... 10 (5) CGT event G1: capital payment for shares... 11 (6) CGT event H1: forfeiture of deposit... 11 (7) CGT event H2: receipt for event relating to a CGT asset... 11
vii (8) CGT event J2: change in status of small business replacement asset... 11 (9) CGT events J5 and J6: failure to satisfy roll-over relief conditions... 11 2-130 Calculating net capital gain or net capital loss... 12 (1) Net capital gain... 12 (2) Net capital loss... 12 2-135 Making choices... 13 (1) No choice... 13 (2) Change of choice?... 13 (3) Executor making choice... 14 (4) Extensions of time... 14 Chapter 3: The recent and proposed legislative changes 15 3-100 Summary of more significant legislative changes... 16 (1) Proposed amendments... 16 Trusts and connected entity status...16 Direct small business participation percentage...17 (2) Table highlighting changes... 17 3-105 Practical implications of commencement of 2006-07 changes... 22 3-110 Practical implications of commencement of 2007-08 changes... 24 Chapter 4: Basic conditions to be met 25 4-100 Context... 26 4-105 CGT asset other than share or trust interest... 26 (1) Charts illustrating operation of basic conditions... 27 4-110 Share or trust interest... 30 (1) Basic condition (b)... 32 (2) Basic condition (d)... 32 CGT concession stakeholder...32 (3) The 90% test: share or trust interest held by company or trust... 33 4-115 CGT event D1... 35 4-120 CGT event K7... 36
viii 4-125 Passively held assets... 37 (1) Special partner rule... 38 (2) Transitional provisions... 39 4-127 Proposed change: earnout arrangements... 39 4-130 Case studies... 40 (1) Case study 1... 40 Patrick...41 Muriel...41 Gainco Pty Ltd...42 (2) Case study 2... 42 Chapter 5: CGT event in relation to CGT asset 43 5-100 The condition... 44 5-105 Examples... 44 5-110 Special rule for CGT event D1... 45 Chapter 6: Maximum net asset value test 47 6-100 Context... 48 6-105 The test... 48 (1) Just before the CGT event... 49 (2) Partner... 50 6-110 What is net value of the CGT assets of an entity?... 50 (1) CGT assets... 51 (2) Market value... 51 (3) The statutory definition... 52 6-115 Disregarded assets: interest in interposed entities... 52 6-120 Disregarded assets: individuals... 54 (1) Asset being used for personal use and enjoyment... 55 Being used...55 Solely...57 Affiliate issues...57
ix (2) Special main residence rule... 59 (3) Superannuation fund... 59 (4) Interest-bearing bank account... 60 (5) Vacant land... 60 6-125 Dwellings... 60 (1) Exclusion (a)... 61 (2) Exclusion (b)... 61 (3) Income-producing use of main residence... 61 (4) When would interest be partly deductible?... 62 (5) Calculation of amount to be included... 62 (6) Use by individual... 63 (7) Pre-2006-07 CGT events... 63 (8) Main residence exemption deeming provisions not relevant... 63 (9) Adjacent land... 64 (10) Jointly-owned dwelling... 64 6-130 Summary of dwelling rules... 64 6-135 Certain assets of affiliates and their connected entities disregarded... 65 (1) Chart of operation... 65 (2) Disregarding rule operates one way only... 66 (3) Only because... 67 6-140 Amounts that reduce the net value of CGT assets... 67 6-145 Liabilities and provisions... 68 (1) Contingent liabilities... 68 (2) Provisions taken into account... 69 6-150 When does liability relate to CGT asset?... 69 6-155 General liabilities... 70 6-160 Case studies... 71 (1) Case study 1... 71 (2) Case study 2... 72 (3) Case study 3... 72 (4) Case study 4... 72 (5) Case study 5... 73 (6) Case study 6... 73
x Chapter 7: Small business entity test 75 7-100 Context... 76 (1) Relevance of small business entity test... 76 (2) The present connected entity and affiliate tests... 76 7-105 Operation of small business entity test... 77 7-110 Small business entity... 79 (1) Business must be carried on... 79 (2) Three possible tests... 79 7-115 What constitutes carrying on a business?... 79 (1) Capital asset ventured into business... 82 (2) Company or individual... 83 (3) Partnership... 83 (4) Rental property... 83 (5) Winding up business... 84 7-120 The immediately preceding income year test... 85 7-125 The actual current year test... 85 7-130 The likely current year test... 85 (1) Likely... 86 7-135 Aggregated turnover... 88 (1) Special rule: passively held assets... 89 (2) Transitional provisions... 90 7-140 Annual turnover... 90 (1) GST excluded... 91 (2) Sales of retail fuel... 91 (3) Regulations... 91 7-145 In ordinary course of carrying on a business... 91 (1) Winding up a business... 93 (2) Transactions with associated entities... 93 7-150 Ordinary income... 93 7-155 Derived... 94 7-160 Business not carried on for whole income year... 96
xi 7-165 Dealings with associates... 96 7-170 Case studies... 97 (1) Case study 1... 97 (2) Case study 2... 98 Chapter 8: Active assets and the active asset test 99 8-100 Context... 100 8-105 Active asset definition... 100 8-110 CGT asset that is not a share or trust interest as an active asset... 100 (1) Passively held assets: winding-up rule... 102 (2) Intangible assets... 102 (3) Earnout right... 103 (4) Held ready for use... 103 (5) Connected entities... 103 (6) Affiliate issues... 104 (7) Transitional provision... 105 8-115 Share or trust interest in non-widely held entity as an active asset... 106 (1) Relevant assets... 106 (2) Financial instruments and cash... 107 (3) Continuing active asset status if reasonable to conclude... 107 (4) Temporary breaks... 107 (5) Active asset via a further entity... 108 8-120 Share or trust interest in widely held entity... 108 8-125 What cannot be an active asset?... 109 8-130 Financial instruments... 109 8-135 Assets producing passive income... 110 (1) Interest... 111 (2) Annuity... 111 (3) Rent... 112 AAT decision: Carson...113 No business...114 AAT decision: Tingari Village...114
xii (4) Examples... 114 (5) Royalties... 114 (6) Main use... 115 8-140 Asset rented to connected entity or affiliate... 115 8-145 Requirements to be met for active asset test... 115 8-150 The active asset test... 116 (1) Interest in asset acquired at different times... 116 (2) Cessation of business... 116 (3) Acquired... 116 8-155 Some issues with shares and trust interests... 118 (1) Time of CGT event happening... 118 Liquidation of company...118 Trust distribution...118 8-160 Case studies... 119 (1) Case study 1... 119 (2) Case study 2... 119 (3) Case study 3... 120 (4) Case study 4... 120 (5) Case study 5... 121 (6) Case study 6... 121 (7) Case study 7... 122 (8) Case study 8... 122 (9) Case study 9... 123 (10) Case study 10... 123 (11) Case study 11... 124 Chapter 9: Affiliates 125 9-100 Context... 126 9-105 Commencement of operation of definition of affiliate... 127 9-110 Definition of affiliate... 127 (1) Spouse or child under 18... 128 (2) Former definition of small business CGT affiliate... 128 (3) Differences... 128
xiii 9-115 Trustee cannot be an affiliate... 129 9-120 The affairs of the business... 129 (1) Affairs... 130 9-125 Acting in defined manner... 131 (1) AAT decisions... 133 9-130 Spouses and children... 135 9-135 The special spouse/child under 18 affiliate rule... 135 (1) Circumstances in which the special rule applies... 135 (2) How the special rule operates... 136 (3) Further consequences... 139 (4) Spouse and child... 140 (5) Some consequences of the rule... 140 (6) Scope of the special spouse/child under 18 affiliate rule... 141 Affiliate status applies generally...141 Capital gain made by affiliate...142 Does the rule only have a beneficial operation?...142 (7) Application and transitional provisions... 143 9-140 Whether an affiliate is an affiliate for all purposes... 143 9-145 Business relationships... 144 Business relationship...145 9-150 Case studies... 145 (1) Case study 1... 146 (2) Case study 2... 146 (3) Case study 3... 147 (4) Case study 4... 148 Pre-2007-08 position...148 Post-2006-07 position...149 (5) Case study 5... 149 CGT event pre-2007-08...149 CGT event post 2006-07...150 (6) Case study 6... 151 Pre-2009 amendments...151 Post-2009 amendments...151 (7) Case study 7... 152
xiv Pre-2009 amendments...152 Post-2009 amendments...152 (8) Case study 8... 153 Chapter 10: Connected entities 155 10-100 Context... 156 10-105 Implications of present connected entity rules... 156 10-110 Connected depends on control... 157 10-115 Indirect control rule... 158 (1) No indirect control through certain public entities... 160 10-120 Control by affiliates... 160 10-125 Relevant control rules... 160 10-130 Control of company... 161 (1) The right to distribution control rule... 161 (2) The voting power control rule... 162 Equity interests carrying right to exercise voting power...163 (3) Rights carried by shares relevant... 163 (4) Right to acquire... 164 (5) Beneficial ownership... 164 10-135 Control percentage between 40% and 50%... 166 (1) Indirect control... 167 (2) Construction of s 328-125(6) ITAA97... 167 (3) Explanatory memorandum... 169 (4) ATO Advanced Guide... 169 (5) Overriding discretion... 171 (6) No application for exercise of discretion needed... 171 (7) Negative discretion... 171 (8) Review of exercise of discretion... 171 (9) Potential effect on active asset status... 172 (10) Reform of the discretion?... 172 10-140 Control of partnership... 172 10-145 Control of trust... 174
xv 10-150 What is a discretionary trust?... 174 10-155 Non-discretionary trusts... 176 10-160 Discretionary trusts... 177 (1) Historical context... 177 CGT events before 2007-08...177 Pattern of distributions control rule...178 10-165 The trustee reasonable to expect to act control rule... 178 10-170 The pattern of distributions control rule... 180 (1) Exempt entity or deductible gift recipient... 181 10-175 Pattern of distributions: control percentage between 40% and 50%... 181 10-180 Example of operation of pattern of distributions control rule... 181 10-185 Loss year controllers... 183 (1) Transitional provisions... 184 (2) Example... 185 (3) Nomination... 186 (4) Precedent... 186 10-190 Distributions after close of income year... 187 10-195 Income and capital distributions to be considered separately... 188 (1) Distinction between income and capital... 189 10-200 Some practical aspects of the pattern of distributions control rule... 190 (1) Any kind of entity... 190 (2) Reasons for utilising the rule... 190 (3) Control in what income years?... 190 (4) Relevant distribution... 191 (5) Distribution resolution... 192 10-205 Case studies... 192 (1) Case study 1... 192 (2) Case study 2... 193 (3) Case study 3... 193 (4) Case study 4... 194 (5) Case study 5... 194
xvi Chapter 11: Significant individuals and CGT concession stakeholders 195 11-100 Context... 196 11-105 The significant individual test... 196 11-110 Significant individual... 196 11-115 CGT concession stakeholder... 197 11-120 Small business participation percentage... 197 11-125 Direct small business participation percentage: company... 198 (1) Redeemable shares... 199 (2) Voting power... 200 (3) Any dividend, any distribution... 201 (4) Company in liquidation... 202 (5) Holding legal and equitable interests... 203 Holding...203 Legal and equitable interests...203 11-130 Direct small business participation percentage: fixed trust... 205 11-135 Direct small business participation percentage: other trusts... 207 (1) Distributions during income year... 207 (2) What is a distribution?... 208 (3) Operation of a default income provision... 208 (4) Some practical points... 209 11-140 Indirect small business participation percentage... 210 11-145 Examples from explanatory memorandum... 211 11-150 Case studies... 214 (1) Case study 1... 214 (2) Case study 2... 214 (3) Case study 3... 215 (4) Case study 4... 215 Chapter 12: The 15-year exemption 217 12-100 Context... 218
xvii (1) Retirement... 218 (2) Retirement exemption limit unaffected... 218 (3) Capital losses not absorbed... 218 (4) Superannuation contributions... 218 12-105 Conditions to be met for individuals... 219 (1) Permanent incapacity... 219 (2) Where certain CGT roll-over relief applies... 219 12-110 Conditions to be met where CGT asset is share or trust interest... 219 12-115 Conditions to be met for companies and trusts... 220 (1) Permanent incapacity... 221 (2) More than one significant individual... 221 (3) Non-fixed trust: loss year... 221 (4) Amendments... 221 (5) Where certain CGT roll-over relief applies... 221 12-120 Ordinary income and other statutory income of company or trust... 222 12-125 Identifying the relevant asset... 222 12-130 Interests in CGT asset acquired at different times... 223 12-135 Change in majority underlying interests... 224 12-140 In connection with retirement... 224 (1) In connection with... 224 (2) Retirement... 224 (3) CGT event after retirement... 225 (4) CGT event before retirement... 225 (5) Further ATO examples... 225 12-145 Permanent incapacity... 226 12-150 Companies and trusts: flow-through of concession to CGT concession stakeholders... 228 12-155 Amounts that can qualify for flow-through concession... 228 (1) Exempt amount... 229 (2) Change in underlying interests in pre-cgt asset... 229 12-160 How flow-through concession works... 229 (1) Extension of two-year period... 230
xviii (2) Payment... 230 12-162 Where distribution is made by a discretionary trust... 231 12-165 CGT events E4 and G1... 232 12-170 Indirect payments... 232 12-175 What payments can qualify?... 233 12-180 Prudent to pay early... 234 12-185 Case studies... 234 (1) Case study 1... 234 (2) Case study 2... 235 Chapter 13: Small business 50% reduction 237 13-100 The reduction... 238 13-105 Other concessions and capital losses... 238 13-110 The reduction is optional... 238 13-115 Making the choice... 239 13-120 Trustee: concession reversed... 239 13-125 Obtaining benefit of reduction amount... 239 Chapter 14: Retirement exemption 241 14-100 Context... 242 (1) Retirement not necessary... 243 (2) Individual... 243 (3) Company or trust... 243 (4) Choice cannot be altered... 243 14-105 Changes: 2006-07 and 2007-08... 243 (1) Individuals and retirement exemption... 244 (2) Company or trust: no retirement necessary... 244 (3) CGT concession stakeholder... 244 (4) Actual capital proceeds... 244 (5) ETP and RBL... 244
xix 14-110 Actual capital proceeds not required... 245 14-115 Retirement exemption and CGT events J2, J5 and J6... 245 14-120 How CGT small business retirement exemption operates for individuals... 246 14-125 When individual taxpayer may choose retirement exemption... 248 (1) Amount available for retirement relief... 248 (2) Limitation on amount... 249 (3) Taxpayer under 55 years of age... 249 (4) Taxpayer 55 years of age or more... 249 (5) Making the choice... 249 (6) Consequences of choice... 249 14-130 Specifying amount chosen (CGT-exempt amount)... 250 (1) Precedent choice and specification... 250 14-135 CGT retirement exemption limit... 251 14-140 Capital gain disregarded for individuals... 251 14-145 Procedure for individuals under 55 years of age... 251 (1) Time of contribution... 252 (2) Capital proceeds received in instalments... 252 (3) Contractual provisions... 252 (4) Transfer of real property... 253 14-150 CGT small business concessions and superannuation contributions... 253 (1) Eligible contributions... 253 (2) Making the choice... 254 (3) CGT cap amount... 254 (4) Transitional arrangements... 255 14-155 How CGT small business retirement exemption operates for companies and trusts... 255 14-160 When company or trust may choose retirement exemption... 257 14-165 Individuals for whom retirement exemption can be chosen... 258 14-170 Specifying CGT-exempt amount and stakeholder percentages... 259 (1) Making the choice... 259 (2) Precedent choice and specification... 259 14-175 Capital gain disregarded for companies and trusts... 261
xx 14-180 Special company and trust conditions... 261 (1) Company or trust must make a payment... 261 (2) Time of making of payment... 262 (3) Market value substitution rule... 262 (4) Capital proceeds received in instalments... 263 (5) Amount of payment... 263 (6) Joint or separate payments... 263 (7) Nature of payment... 263 (8) Stakeholder under 55 years of age... 264 (9) No allowable deduction... 265 14-185 Operation of deemed dividend provisions... 265 (1) Section 109 ITAA36... 266 (2) Division 7A ITAA36... 267 Chapter 15: Roll-over relief 269 15-100 Context... 270 (1) 2006-07 amendments... 270 (2) Transitional provisions... 271 15-105 How CGT small business roll-over relief works... 271 15-110 Choosing roll-over relief... 272 (1) Amount available for roll-over... 273 (2) Deferring a capital gain... 274 (3) Making the choice... 274 15-115 Retriggering of rolled-over capital gain... 274 15-120 Replacement asset period... 275 (1) Discretion to extend period... 275 (2) Increase of capital proceeds... 276 15-125 Fourth element expenditure... 276 15-130 CGT event J5... 277 (1) Share or trust interest: additional requirement... 277 (2) Time of event... 279 (3) Capital gain... 279 (4) Concessions available... 279
xxi 15-135 What can qualify as a replacement asset?... 280 15-140 CGT event J6... 280 (1) Time of event... 281 (2) Capital gain... 281 (3) What CGT concessions are available?... 281 15-145 CGT event J2... 282 (1) CGT event J2 and farmer roll-over provisions... 282 (2) Share or trust interest... 283 (3) Other CGT event may also happen... 283 (4) Time of event... 283 (5) Capital gain... 283 (6) Other concessions... 284 15-150 Death of individual... 284 15-155 Small business reliefs and CGT events J2, J5 and J6... 285 15-160 What if the taxpayer ceases to exist during the replacement asset period?... 286 15-165 How the rolled-over capital gain is applied against replacement assets or expenditure... 287 15-170 Using roll-over relief as a deferral mechanism... 288 (1) Maximum net asset value test/small business entity... 289 (2) How a rolled-over capital gain is applied... 289 15-175 Transitional issues... 289 (1) Choosing retirement relief... 290 (2) CGT events J2, J5 and J6... 290 15-180 Case studies... 291 (1) Case study 1... 291 (2) Case study 2... 292 Chapter 16: Company distributions 293 16-100 Context... 294 16-105 Treatment of non-taxed amount... 294 (1) 15-year exempt amount... 294 (2) Retirement exemption amount... 294
xxii (3) 50% reduction amount... 294 (4) Roll-over amount... 296 Chapter 17: Trust distributions 297 17-100 Context... 298 (1) Terminology... 298 17-105 Capital gain may or may not be reduced to nil... 298 (1) Capital gain reduced to a lesser amount... 299 Position for 2010-11 and later income years...299 Specific entitlement...300 Adjusted Division 6 percentage...300 Example...301 Position for 2009-10 and earlier income years...302 (2) Capital gain reduced to nil... 303 (3) CGT event J2, J5 or J6... 303 17-110 Distribution of 15-year exempt amount... 304 17-115 Distribution of discount or reduction amount... 304 (1) Discretionary trust distribution... 304 (2) Unit trust... 305 (3) CGT event C2... 305 (4) CGT event E4... 305 Circumstances in which CGT event E4 will happen...305 Consequences of CGT event E4 happening...306 Time of CGT event E4...306 The non-assessable part...306 CGT event E4 and a reduction amount...307 CGT event E4 capital gain and the CGT concessions...307 17-120 CGT event E4 v CGT event C2... 308 17-125 Trustee assessed under s 99A ITAA36... 308 (1) 2010-11 and later income years... 308 (2) 2009-10 and earlier income years... 309 (3) Rolled-over capital gain... 309 (4) Section 98(3) or 98(4) ITAA36... 309
xxiii 17-130 Case study... 309 (1) Fred... 310 2010-11...310 2011-12...311 (2) Ticktock Pty Ltd... 312 2010-11...312 2011-12...312 Chapter 18: Partnerships and partners 315 18-100 What is a partnership?... 316 18-105 Some fundamental propositions... 316 18-110 Is a partnership an entity?... 317 (1) Tax law partnership... 318 18-115 Basic conditions: issues for assets used by partnerships... 319 (1) Asset a partnership asset... 319 (2) Asset owned by a partner... 320 (3) Asset owned by entity that is not a partner... 320 (4) Former rule... 321 18-120 Small business entity issues... 321 18-125 Active asset issues... 322 18-130 Affiliate issues... 323 18-135 Connected entity issues... 325 18-140 Case studies... 326 (1) Case study 1... 326 (2) Case study 2... 327 (3) Case study 3... 328 (4) Case study 4... 328 (5) Case study 5... 329 (6) Case study 6... 329 (7) Case study 7... 329 (8) Case study 8... 330 (9) Case study 9... 330
xxiv Position before the 2009 amendments...331 Position after the 2009 amendments...331 Chapter 19: Deceased estates 333 19-100 Context... 334 (1) Roll-over relief... 334 19-105 CGT event within two years of death rule... 335 (1) When can the rule operate?... 335 (2) How the rule operates... 335 (3) Commencement... 336 (4) Making choices... 336 (5) Devolution to legal personal representative... 336 (6) Passing to a beneficiary... 336 (7) Testamentary trust... 337 (8) Joint tenants... 337 (9) What CGT events?... 337 (10) CGT event within two years... 337 (11) Discretion to extend two-year period... 338 (12) Situations where an asset does not pass under will... 338 (13) What reliefs?... 338 (14) Deceased s position immediately before death... 339 (15) Ordinary CGT small business relief rules... 339 19-110 Asset owned by joint tenants... 340 19-115 Applying ordinary CGT small business relief rules to deceased estates... 341 19-120 Some other consequences of death for CGT small business reliefs... 342 19-125 Case studies... 342 (1) Case study 1... 342 (2) Case study 2... 343 (3) Case study 3... 343 (4) Case study 4... 344 (5) Case study 5... 344 (6) Case study 6... 345 (7) Case study 7... 345
Chapter 20: Superannuation funds and members 347 20-100 Superannuation funds and CGT small business relief... 348 20-105 Exclusion from net value of CGT assets... 349 20-110 Case study... 349 xxv Chapter 21: Tips and traps 351 21-100 Context... 352 21-105 Impact of recent changes... 352 21-110 Existing arrangements must be monitored... 353 21-115 General anti-avoidance provisions (Pt IVA)... 354 (1) Making choices... 354 21-120 CGT merits of different kinds of entities... 354 21-125 Active asset test... 355 (1) Just before... 355 (2) Use or holding ready for use... 356 (3) Period of time... 356 (4) Connected entity... 357 (5) Affiliate... 357 (6) Rent-producing use... 357 21-130 Maximum net asset value test... 358 (1) Alternative test... 358 (2) Threshold... 358 (3) Just before... 358 (4) Effect of what has been done in the past... 358 (5) Connected entities... 358 (6) Exempt assets... 359 (7) Dividend... 359 (8) Incurring of liability... 359 (9) Borrowing to acquire shares or units... 360 (10) Entity connected because of affiliate... 360 (11) Timing issues involved... 360
xxvi 21-135 Small business entity test... 360 (1) Alternative test... 360 (2) Small business entity... 361 (3) Annual turnover... 361 (4) Use of small business entity test... 362 21-140 Affiliate issues... 362 (1) Relevance of affiliate status... 362 (2) Definition of affiliate... 362 (3) Spouse/child under 18 years of age... 362 21-145 Connected entity issues... 363 (1) Relevance of connected entity rules... 363 (2) Control percentage less than 50%... 364 (3) Right to distribution control rule... 364 (4) Discretionary trusts... 364 (5) Control because of affiliates... 365 (6) Income and capital... 365 21-150 Significant individual issues... 366 (1) Trusts and small business participation percentage... 366 (2) Discretionary trusts... 366 (3) Income and capital... 366 21-155 CGT 15-year small business exemption... 367 (1) Company or trust... 367 21-160 CGT small business 50% reduction... 367 (1) Choice for reduction not to apply... 367 (2) Individual and discretionary trust... 367 (3) Consequence of choice... 367 21-165 CGT small business retirement exemption... 368 (1) Actual proceeds not necessary... 368 (2) No actual retirement required... 368 (3) Excessive retiring allowance company... 368 (4) Under 55 years of age... 369 (5) Division 7A ITAA36... 369 21-170 CGT small business roll-over relief... 369 (1) Automatic disregarding of capital gain... 369
xxvii (2) Replacement asset: kind... 370 (3) Replacement asset: share or trust interest... 370 (4) Improvements... 370 (5) Rolled-over gain remade... 370 (6) Retirement exemption or roll-over relief... 370 (7) Roll-over of part of gain... 371 21-175 Deceased estates... 371 (1) CGT event within two years of death... 371 (2) Ordinary CGT rules... 371 (3) Changes resulting from death... 371 (4) Joint tenants... 371 21-180 Company and trust structuring... 372 21-185 Partnership structuring... 373 21-190 Passive asset issues... 373 (1) Passive asset... 373 (2) What tests need to be met... 374 (3) Former limited spouse affiliate rule... 374 21-195 Deferring capital losses... 375 21-200 Case study... 375 Index 377