Income Tax Assessment Act 1997
The original interest holder can obtain only a partial roll-over if its *capital proceeds for its original interest include something (the ineligible proceeds ) other than its replacement interest. There is no roll-over for that part (the ineligible part ) of its original interest for which it received ineligible proceeds.
The *cost base of the ineligible part is that part of the cost base of your original interest as is reasonably attributable to it.
Ken owns 100 shares in Aim Ltd. Those shares have a cost base of $2.
Ken accepts an offer from LBZ Ltd to acquire those shares. The offer is 1 share in LBZ (market value $4) plus $1 for each Aim share.
Ken chooses the roll-over to the extent that he can.
The cost base of the ineligible part is [ $100 × $200 ] ÷ $500 = $40.
Ken makes a capital gain of $100 - $40 = $60.
(Repealed by No 89 of 2000)