Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 124.875

Capital gains and losses disregarded

  (1)   Any * capital gain or * capital loss from * CGT event A1 happening to the transferor under the trust restructure is disregarded (even if * CGT event J4 applies).

Note:   The effect of the roll - over may be reversed if the transferor does not cease to exist within 6 months: see section   104 - 195.

Cost base is transferred

  (2)   The first element of the * cost base and * reduced cost base (for the transferee) of each * CGT asset that the transferee * acquires under the trust restructure is the same as the cost base and reduced cost base of that asset (for the transferor) just before that acquisition.

Note:   For the cost base and reduced cost base of interests in the transferee: see Subdivision   124 - A.

Pre - CGT assets retain their status

  (3)   If the transferor * acquired any of the * CGT assets * disposed of to the transferee under the trust restructure before 20   September 1985, the transferee is taken to have acquired it before that day.

  (4)   However, subsection   (3) is taken never to have applied to such an asset of the transferee if subsection   104 - 195(4) (CGT event J4) applies to the transferee in relation to the asset.

Exception: trading stock

  (5)   This section does not apply to a * CGT asset if:

  (a)   the asset was an item of * trading stock of the transferor and becomes an item of trading stock of the transferee; or

  (b)   the asset was not an item of trading stock of the transferor but becomes an item of trading stock of the transferee when the transferee * acquires it.

Exception: asset must be taxable Australian property for foreign resident transferee

  (6)   For a transferee that is a foreign resident, this section only applies to a * CGT asset that is * taxable Australian property just after the transferee * acquires it under the trust restructure.