Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 122.125

Disposal or creation of assets--wholly-owned company

                   All of the partners in a partnership can choose to obtain a roll-over if one of the * CGT events (the trigger event ) specified in this table happens involving the partners and a company in the circumstances set out in sections 122-130 to 122-140.

 

Relevant * CGT events

Event No.

What the partners do

A1

* Dispose of their interests in a * CGT asset of the partnership, or all the assets of a business carried on by the partnership, to the company

D1

Create contractual or other rights in the company

D2

Grant an option to the company

D3

Grant the company a right to income from mining

F1

Grant a lease to the company, or renew or extend a lease

Note 1:       The roll-over starts at section 122-150.

Note 2:       Section 103- 25 tells you when you have to make the choice.

Example:    Michael and Sandra operate a fish shop in partnership. They agree to incorporate the business so they dispose of their interests in all its assets to a company. They are the only shareholders of the company.



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