Income tax: capital gains: in the first element of the cost base of a CGT asset in subsection 110-25(2) of the Income Tax Assessment Act 1997, does money or property necessarily have to be paid or given to the entity that caused a CGT event (for example a disposal) to happen to the asset?

No. The money does not have to be paid or given to the entity which disposed of the CGT asset. However, the money or property still needs to have been paid or given in respect of the acquisition of the asset. Example: Bill sells an asset to James for $100,000. The terms of the sale are that James must pay the $100,000 to an entity nominated by Bill. Even though James does not pay the money to Bill, the person who disposed of the asset, James pays it 'in respect of acquiring' the asset and the amount therefore can be included in the first element of the asset's cost base.

We invite you to comment on this draft Taxation Determination. We are allowing 4 weeks for comments before we finalise the Determination. If you want your comments considered, please provide them to us within this period. Comments by Date: 4 December 2002 Contact officer details have been removed following publication of the final ruling.