INCOME TAX ASSESSMENT ACT 1997
Note: A Commissioner ' s Remedial Power (CRP 2017/2) is relevant to this part of the tax law. Taxation Administration (Remedial Power - Small Business Restructure Roll-over) Determination 2017 (F2017L01687) modifies the operation of s 40-340 of the Income Tax Assessment Act 1997 and any other provisions of a taxation law whose operation is affected by the modified operation of s 40-340 in relation to an asset transferred under a small business restructure roll-over (item 8 of the table in s 40-340(1) ).
The operation of the relevant provisions is modified as follows:
If s 40-340 of ITAA 1997 provides for roll-over relief in relation to a disposal of a depreciating asset because the condition in item 8 of the table in s 40-340(1) of ITAA 1997 is satisfied in relation to the asset, that section has effect as if it also provided that the disposal of the asset has no direct consequences under the income tax law (other than Div 40 of ITAA 1997).
The modification applies in respect of transfers on or after 8 May 2018.
An entity must treat a modification as not applying to it or any other entity if the modification would produce a less favourable result for it. The Commissioner is empowered by s 370-5 of Sch 1 to the Taxation Administration Act 1953 to make modifications, by legislative instrument, to ensure the law is administered to achieve its intended purpose or object.
The *income tax law applies to an entity in relation to the transfer of an asset by the entity, or to the entity, as if the transfer takes place for the asset ' s *roll-over cost if:
(a) the transfer occurs under a transaction in relation to which section 328-430 applies; and
(b) a roll-over under this Subdivision is available under that section in relation to the asset. 328-455(2)
The asset ' s roll-over cost is whichever of the following amounts is applicable in relation to the transfer:
(a) in relation to the application of subsection (1) to the asset as a *CGT asset (other than *trading stock, a *revenue asset or a *depreciating asset) - the transferor ' s *cost base for the asset just before the transfer takes effect;
(b) in relation to the application of subsection (1) to the asset as trading stock - the amount equal to:
(i) the *cost of the item for the transferor; or
(ii) if the transferor held the item as trading stock at the start of the income year - the *value of the item for the transferor then;
(c) in relation to the application of subsection (1) to the asset as a revenue asset - the amount that would give rise to the transferor not making a profit or a loss on the transfer.