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INCOME TAX ASSESSMENT ACT 1997 - SECT 126.60

Consequences of roll - over

Consequences for the originating company in all cases

  (1)   A * capital gain the originating company makes from the trigger event is disregarded.

Consequences for the recipient company (disposal case)

  (2)   For a disposal case, if the originating company * acquired the roll - over asset on or after 20   September 1985:

  (a)   the first element of the asset's * cost base (in the hands of the recipient company) is the asset's cost base (in the hands of the originating company) when the recipient company acquired it; and

  (b)   the first element of the asset's * reduced cost base (in the hands of the recipient company) is worked out similarly.

Note 1:   There are special indexation rules for roll - overs: see Division   114.

Note 2:   The reduced cost base may be modified for a roll - over happening after a demerger: see section   125 - 170.

  (3)   If the originating company * acquired the roll - over asset before 20   September 1985, the recipient company is taken to have acquired it before that day.

Note 1:   A capital gain or loss you make from a CGT asset you acquired before 20   September 1985 is generally disregarded: see Division   104. This exemption is removed in some situations: see, for example, Division   149.

Note 2:   Under section   716 - 855, where there have been certain roll - overs, the cost base and reduced cost base of pre - CGT assets for the purposes of Part   3 - 90 (Consolidated groups) are worked out by applying subsection   (2), rather than subsection   (3), of this section.

  (4)   If the trigger event involved a * personal use asset of the originating company, the recipient company is taken to have * acquired one.

Consequences for the recipient company (creation case)

  (5)   For a creation case, the first element of the asset's * cost base (in the hands of the recipient company) is the amount applicable under this table. The first element of its * reduced cost base is worked out similarly.

 

Creation case

Event No.

Applicable amount

D1

the * incidental costs the originating company incurred that relate to the trigger event

D2

the expenditure the originating company incurred to grant the option

D3

the expenditure the originating company incurred to grant the right

F1

the expenditure the originating company incurred on the grant, renewal or extension of the lease

    The expenditure can include giving property: see section   103 - 5.

Note:   CGT event J1   may occur if the recipient company stops being a member of the wholly - owned group while still owning the roll - over asset: see section   104 - 175.


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