[Legislation] Section 115-40 Capital gain resulting from agreement made within a year of acquisition. [Explanatory Memorandum] 11.29 If a taxpayer makes a capital gain from a CGT event happening to a CGT asset acquired by the taxpayer more than 12 months before the CGT event, under an agreement entered into witin that 12 month period, the capital gain does not qualify for the CGT discount [item 13, section 115-40] . This rule will prevent taxpayers inappropriately taking advantage of the CGT discount by seeking to extend artificially the period of ownership of the asset that produces the capital gain. [Commentary] Jun 17, 2008 (Weekly Tax Bulletin - ABIX via COMTEX) -- Taxpayers who sell stock to realise share price gains may not qualify for the capital gains tax (CGT) discount if the sale occurs within one year of the shares being bought. Australia's anti-avoidance rules are intended to stop the one-year holding period from being abused in instances where an agreement to sell an asset is forged within 12 months of the asset being purchased. Section 115-40 gives the Tax Commissioner a powerful tool to prevent the pre-arrangement of disposal within a one-year period in cases where gains are realised on assets including shares that are eligible for the CGT discount. …http://www.highbeam.com/doc/1G1-180209170.html
