If you receive money because a CGT event happens, you can choose rollover 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 a reasonable period 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 – Rollover applies
Trish paid for the repair of an asset for which she was compensated after part of it was destroyed on 1 September 2002. Trish's expenditure qualifies for the rollover concession if it was incurred any time during the period 1 September 2001 to 30 June 2004.
The replacement asset need not be identical to the one it is replacing. However, for rollover 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 example
Example – Rollover 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 rollover concession because she does not use the rental property for the same or similar purpose as her old business premises.End of example