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If you receive money because a CGT event happens, you can choose roll-over only if:
- you incur expenditure in acquiring another CGT asset or
- part of the original asset s lost or destroyed and you incur expenditure of a capital nature in repairing or restoring it.
You must incur at least some of the expenditure no earlier than one year before the event happens or within one year after the end of the income year n which the event happens. For example, you paid for the repair of an asset for which you were compensated after part of it was destroyed on 1 September 1998. Your expenditure qualifies for the concession if it is incurred any time during the period 1 September 1997 to 30 June 2000. The Australian Taxation Office may extend this period in special circumstances.
The replacement asset need not be identical to the one it is replacing. However, for roll-over to apply, you must use it in the same business or for the same or a similar purpose as the one for which you used the original asset. For example, there is no roll-over if you buy a rental property with money you receive when your manufacturing business is destroyed.
You cannot hold as trading stock any replacement asset you acquire.
Last modified: 18 Sep 2009QC 18323