Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 124 - Replacement-asset roll-overs  

Subdivision 124-Q - Exchange of stapled ownership interests for ownership interests in a unit trust  

Operative provisions

SECTION 124-1060   Consequences of the roll-over for interposed trust  

124-1060(1)    
Apply this section separately for the interposed trust in relation to the * ownership interests in each * stapled entity that the trustee of the interposed trust * acquires under the * scheme.

124-1060(2)    
A whole number of * ownership interests in a * stapled entity that the trustee * acquires under the * scheme are taken to have been acquired before 20 September 1985 if any of the stapled entity ' s assets as at the completion time were acquired by it before that day.

Note:

Generally, a capital gain or capital loss from a CGT asset acquired before 20 September 1985 can be disregarded: see Division 104 .

124-1060(3)    
The number (worked out as at the completion time) is the greatest possible that (when expressed as a percentage of all the * ownership interests in the * stapled entity * acquired by the trustee) does not exceed:

(a) the * market value of the stapled entity ' s assets that it acquired before 20 September 1985; less

(b) its liabilities (if any) in respect of those assets;

expressed as a percentage of the market value of all the stapled entity ' s assets less all of its liabilities. The amounts in paragraphs (a) and (b) are to be worked out as at the completion time.

124-1060(4)    
The first element of the * cost base and * reduced cost base of each of the trustee ' s * ownership interests in that * stapled entity that are not taken by subsection (3) to have been * acquired before 20 September 1985 is such proportion as is reasonable of the total of the cost bases (as at the completion time) of that stapled entity ' s assets that it acquired on or after that day less its liabilities (if any) in respect of those assets.

124-1060(5)    
In applying this section:

(a) a liability of a * stapled entity that is not a liability in respect of a specific asset or assets of the stapled entity is a liability in respect of all the assets of the stapled entity; and

(b) if a liability is in respect of 2 or more assets, the proportion of the liability that is in respect of any one of those assets is such amount as is reasonable having regard to the * market values of each of those assets.