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-B - Asset compulsorily acquired, lost or destroyed  

The consequences of a roll-over being available

SECTION 124-90   Consequences for receiving an asset  

124-90(1)  
If you receive another *CGT asset for the event happening, there are these consequences if you choose to obtain a roll-over.

124-90(2)  
A *capital gain you make from the original asset is disregarded.

124-90(3)  
If you *acquired the original asset on or after 20 September 1985:

(a) the first element of the other asset's *cost base is the original asset's cost base at the time of the event; and

(b) the first element of the other asset's *reduced cost base is the original asset's reduced cost base at the time of the event.

Note:

There are special indexation rules for roll-overs: see Division 114 .

Example:

Steven bought land in 1999 for $100,000. In 2001 the government compulsorily acquires the land and gives him new land in return.

A capital gain he makes from the original land is disregarded. Suppose the original land's cost base when it is acquired is $120,000. The first element of the new land's cost base becomes $120,000.

124-90(4)  
If you acquired the original asset before 20 September 1985, you are taken to have *acquired the other asset before that day.