• Relationship breakdown

    Normally capital gains tax (CGT) applies to any change of ownership of an asset. However, if you transfer an asset to your spouse because of the breakdown of your marriage or relationship, there is usually an automatic rollover of the asset.

    'Rollover' means the transferor spouse disregards the capital gain or loss that would otherwise arise. In effect, the person who receives the asset (the transferee spouse) will make the capital gain or loss when they subsequently dispose of the asset. The cost base of the asset is also transferred to the transferee spouse.

    Generally the rollover applies if:

    • your marriage or relationship ended on or after 20 September 1985
    • ownership of an asset, or a share in a jointly-owned asset, is transferred between you and your spouse, or from a company or trust to one of you
    • the transfer of ownership is because of a court order, formal agreement or award.

    You can't choose whether or not the rollover applies.

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    Last modified: 17 Jul 2017QC 52251