Capital Gains Tax (CGT) 2015

Forgive but don't forget: CGT event C2 and related party loans

Source: Taxation In Australia Journal Article

Published Date: 1 Sep 2015


When loans between related parties are forgiven, particularly within family groups, it is important that the tax issues that may arise are not forgotten. Such issues may include determining if and when CGT event C2 happens under Subdiv 104-C of the Income Tax Assessment Act 1997 (Cth) (ITAA97), and considering the consequences of the personal-use asset provisions of Subdiv 108-C and the market value substitution rules in Subdiv 112-A and Div 116 ITAA97.

This article provides guidance on the tax issues that may arise when CGT event C2 happens to a related party loan as a consequence of forgiveness and a capital loss is intended to be claimed, or carried forward, by the lender.

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Capital Gains Tax (CGT) 2015

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