If you receive money because a CGT event happens, you can choose roll-over only if:
- you incur expenditure in acquiring another CGT asset that is used:
- in your business for a reasonable period if the original asset was a business asset, or
- otherwise for the same or a similar purpose as the original asset, or
- part of the original asset is 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 in which the event happens.
This period may be extended in special circumstances.
Example: Roll-over applies
Trish paid for the repair of an asset for which she was compensated after part of it was destroyed on 1 September 2001. Trish's expenditure qualifies for the roll-over concession if it was incurred any time during the period 1 September 2000 to 30 June 2003.
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. Also, your replacement asset cannot become an item of trading stock nor can it be a depreciating asset.
End of exampleExample: Roll-over does not apply
Denise receives money when her manufacturing business premises are destroyed. She buys a rental property with this money.
Denise cannot access the roll-over concession because she does not use the rental property for the same or similar purpose as her old business premises.
End of example