Income Tax Assessment Act 1997
SECTION 40-340 Roll-over relief
Automatic roll-over relief
40-340(1)
There is roll-over relief if:
(a) there is a *balancing adjustment event because an entity (the transferor ) disposes of a *depreciating asset in an income year to another entity (the transferee ); and
(b) the disposal involves a *CGT event; and
(c) the conditions in an item in this 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 | The transferor is able to choose a roll-over under Subdivision 122-A for the *CGT event. |
. | ||
2 | Disposal of asset by partnership to wholly-owned company | The transferor is a partnership, the property is partnership property and the partners are able to choose a roll-over under Subdivision 122-B for the disposal by the partners of the *CGT assets consisting of their interests in the property. |
. | ||
2A | Transfer of a *CGT asset of a trust to a company under a trust restructure | The transferor and transferee are able to choose a roll-over under Subdivision 124-N for the *CGT event. |
. | ||
3 | Marriage or relationship breakdown | There is a roll-over under Subdivision 126-A for the *CGT event. |
. | ||
4 | Disposal of asset to another member of the same wholly-owned group | The transferor is able to choose a roll-over under Subdivision 126-B for the *CGT event. |
. | ||
5 | *Disposal of asset between certain trusts | The trustees of the trusts choose to obtain a roll-over under Subdivision 126-G in relation to the disposal. |
. | ||
6 | Disposal of asset as part of merger of superannuation funds | The transferor chooses a roll-over under Subdivision 310-D in relation to the disposal. |
. | ||
7 | (Repealed by No 89 of 2013) | |
. | ||
8 | Transfer of asset under a small business restructure roll-over | A roll-over under Subdivision 328-G would be available in relation to the asset if the asset were not a *depreciating asset. |
Note 1:
Section 40-345 sets out what the relief is.
Note 2:
This Act also applies as if there were roll-over relief under this subsection in the circumstances set out in section 620-30 (which is about a body incorporated under one law ceasing to exist and disposing of its assets to a company incorporated under another law that has not significantly different ownership).
40-340(2)
In applying an item in the table in subsection (1), disregard the following so far as they relate to the *depreciating asset you disposed of:
(a) an exemption in Division 118 (which contains the general exemptions from CGT); and
(b) subsection 122-25(3) (which excludes certain assets from some kinds of CGT roll-over); and
(c) subsection 124-870(5) (which excludes certain assets from roll-over relief under Subdivision 124-N ).
Choosing roll-over relief
40-340(3)
There is also roll-over relief if:
(a) there is a *balancing adjustment event for a *depreciating asset because of subsection 40-295(2) (about a change in the holding of, or in interests in, the asset); and
(b) the entity or entities that had an interest in the asset before the change (also the transferor ) and the entity or entities that have an interest in the asset after the change (also the transferee ) jointly choose the roll-over relief.
Example:
The change could be a variation in the constitution of a partnership or in the interests of the partners.
Note 1:
Section 40-345 sets out what the relief is.
Note 2:
Subdivision 328-D sets out what the relief is for small business entities that calculate deductions for their depreciating assets under that Subdivision.
40-340(4)
The choice must:
(a) be in writing; and
(b) contain enough information about the transferor ' s holding of the property for the transferee to work out how this Division or Subdivision 328-D applies to the transferee ' s holding of the * depreciating asset; and
(c) be made within 6 months after the end of the transferee ' s income year in which the * balancing adjustment event occurred, or within a longer period allowed by the Commissioner.
40-340(5)
If you die before the end of the time allowed for jointly choosing roll-over relief, the trustee of your estate may be a party to the choice.
40-340(6)
The transferor must keep the choice or a copy of it for 5 years after the *balancing adjustment event occurred.
Penalty: 30 penalty units.
40-340(7)
The transferee must keep the choice or a copy of it until the end of 5 years after the next *balancing adjustment event occurs for the *depreciating asset.
Penalty: 30 penalty units.
Exception: Subdivision 170-D applies
40-340(8)
There can be no roll-over relief if Subdivision 170-D (about transactions by a company that is a member of a linked group) applies to the disposal of the *depreciating asset or the change in interests in it.
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