INCOME TAX ASSESSMENT ACT 1936

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 73AA   SECTION 73A ROLL-OVER RELIEF IN THE CASE OF CERTAIN CGT ROLL-OVERS  

73AA(1)   Roll-over relief where CGT roll-over relief allowed.  

This section applies to the disposal of a building, or part of a building, by a taxpayer (in this section called the transferor ) to another taxpayer (in this section called the transferee ) if:


(a) (Omitted by No 46 of 1998)


(b) subject to subsection (7), deductions have been allowed or are allowable under subsection 73A(2) to the transferor in respect of the building or the part of the building; and


(c) the disposal involves a CGT event; and


(d) the conditions in an item in the table are satisfied.


CGT roll-overs that qualify transferor for relief
Item Type of CGT roll-over Conditions
1 Disposal of asset to wholly-owned company There is a roll-over under Subdivision 122-A of the Income Tax Assessment Act 1997 for the CGT event.
.
2 Disposal of asset by partnership to wholly-owned company The transferor is a partnership, the building or part is partnership property, and there is a roll-over under Subdivision 122-B of the Income Tax Assessment Act 1997 for the disposal by the partners of the CGT assets consisting of their interests in the building or part.
.
3 Marriage or relationship breakdown There is a roll-over under Subdivision 126-A of the Income Tax Assessment Act 1997 for the CGT event.
.
4 Disposal of asset to another member of the same wholly-owned group There is a roll-over under Subdivision 126-B of the Income Tax Assessment Act 1997 for the CGT event.

73AA(2)   No balancing charges.  

Subsection 73A(4) (which deals with balancing charges) does not apply to the disposal of the building or the part of the building by the transferor.

73AA(3)   Transferee to inherit certain characteristics from transferor.  

Section 73A applies as if:


(a) the transferee had acquired the building or the part of the building for a consideration equal to the cost of the building or the part of the building to the transferor; and


(b) deductions were not allowable to the transferee under subsection 73A(2) in respect of:


(i) so much of the cost of the building or the part of the building to the transferor as was allowed or allowable as a deduction to the transferor under that subsection in respect of the building or the part of the building; or

(ii) if there have been 2 or more prior successive applications of this section - so much of the cost of the building or the part of the building to the transferor as was allowed or allowable as a deduction to the prior successive transferors under that subsection in respect of the building or the part of the building; and


(c) deductions were not allowable to the transferor under subsection 73A(2) in respect of the building or the part of the building for the year of income in which the disposal took place or for a subsequent year of income.

73AA(4)   Subsection 73A(2A) - special rules.  

If subsection 73A(2A) applies to the transferor and in relation to the building or the part of the building, that subsection applies in relation to the transferee and in relation to the building or the part of the building.

73AA(5)   Disposal by transferee where no roll-over relief - inheritance of deductions.  

If:


(a) after the disposal of the building or the part of the building to the transferee, the building or the part of the building is lost or destroyed or the transferee disposes of the building or the part of the building; and


(b) in the case of a disposal by the transferee - this section does not apply to the disposal;

then, for the purposes of the application of subsection 73A(4) in relation to the loss, destruction or disposal, the total of:


(c) the deductions allowed or allowable to the transferor under subsection 73A(2) in relation to the building or the part of the building; and


(d) if there have been 2 or more prior successive applications of this section - the deductions allowed or allowable to the prior successive transferors under subsection 73A(2) in relation to the building or the part of the building;

are taken to have been deductions allowed or allowable to the transferee under subsection 73A(2) in relation to the building or the part of the building.

73AA(6)   Meaning of " cost " .  

A reference in this section to the cost of a building or of a part of a building to the transferor is a reference to expenditure of a capital nature incurred by the transferor in the construction or acquisition of the building or the part of the building, or in making any alteration or addition to the building or to the part of the building.

73AA(7)   Second or subsequent application of section - paragraph (1)(b) does not apply.  

If, apart from this subsection, this section has applied to the disposal of the building or the part of the building to the transferee, then, in working out whether this section applies to a subsequent disposal of the building or the part of the building by:


(a) the transferee; or


(b) one or more subsequent successive transferees;

this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.


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