Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 126 - Same-asset roll-overs  

Subdivision 126-B - Companies in the same wholly-owned group  

Operative provisions

SECTION 126-60   Consequences of roll-over   Consequences for the originating company in all cases

126-60(1)  


A *capital gain the originating company makes from the trigger event is disregarded. Consequences for the recipient company (disposal case)

126-60(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 .

126-60(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.

126-60(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)

126-60(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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