INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 10AAA - Transport of minerals and quarry materials  

Subdivision A - Transport of certain minerals  

SECTION 123BBA   ROLL-OVER RELIEF WHERE CGT ROLL-OVER RELIEF ALLOWED UNDER SECTION 160ZZM, 160ZZMA, 160ZZN, 160ZZNA OR 160ZZO OR WHERE ELECTION FOR ROLL-OVER RELIEF MADE UNDER SECTION 123F  

123BBA(1)   Roll-over relief where CGT roll-over relief allowed.  

This section applies to the disposal of property before the 1997-98 year of income by a taxpayer (in this section called the transferor ) to another taxpayer (in this section called the transferee ) if:


(a) either:


(i) in a case where the transferor is not a partnership - section 160ZZM , 160ZZMA, 160ZZN or 160ZZO applies to the disposal of the property by the transferor; or

(ii) if the transferor is a partnership - the property is partnership property of the partnership and section 160ZZNA applies to the corresponding disposal, by all of the partners in the partnership, of their interests in the property; and


(b) subject to subsection (16), deductions have been allowed or are allowable under this Subdivision to the transferor in respect of the property.

Note:

Common rule 1 in Subdivision 41-A of the Income Tax Assessment Act 1997 sets out when roll-over relief is available in relation to the disposal of property in the 1997-98 year of income or a later year of income by a taxpayer to another taxpayer.

123BBA(2)   Roll-over relief where joint election made under section 123F .  

This section also applies if a joint election for roll-over relief is made under subsection 123F(2) by both the transferor and the transferee referred to in that subsection in relation to the disposal of property before the 1997-98 year of income.

Note:

Common rule 1 in Subdivision 41-A of the Income Tax Assessment Act 1997 sets out when a joint election for roll-over relief may be made in relation to the disposal of property in the 1997-98 year of income or a later year of income.

123BBA(3)   No balancing charges or deductions.  

Section 123C (which deals with balancing charges and deductions) does not apply to the disposal of the property by the transferor.

123BBA(4)   Transferee to inherit certain characteristics from transferor.  

This Subdivision and Subdivision C (to the extent to which it relates to this Subdivision) apply as if:


(a) the transferee had acquired the property for a consideration equal to so much of the capital expenditure of the transferor in respect of the property as is expenditure to which this Subdivision applies; and


(b) deductions were not allowable to the transferee under this Subdivision in respect of:


(i) so much of the capital expenditure of the transferor in respect of the property as was allowed or allowable as a deduction to the transferor under this Subdivision; or

(ii) if there have been 2 or more prior successive applications of this section - so much of the capital expenditure in respect of the property as was allowed or allowable as a deduction to the prior successive transferors under this Subdivision; and


(c) the 10-year period referred to in paragraph 123B(1)(a) or the 20-year period referred to in paragraph 123B(1)(b) , as the case may be, over which the transferee would otherwise be allowed deductions in respect of the property were reduced by one year for each year of income for which a deduction was allowed or was allowable under this Subdivision to:


(i) the transferor in respect of the property; or

(ii) if there have been 2 or more prior successive applications of this section - any of the prior successive transferors in respect of the property.

123BBA(5)   Inheritance of section 123BA election.  

If the transferor made an election under section 123BA in respect of capital expenditure incurred by the transferor in respect of the property, this Subdivision applies as if the transferee had made an election under that section in respect of the capital expenditure of the transferee.

123BBA(6)   Rule where no section 123BA election made.  

If the transferor did not make an election under section 123BA in respect of capital expenditure incurred by the transferor in respect of the property, the transferee is not entitled to make an election under that section in respect of the capital expenditure of the transferee.

123BBA(7)   Inheritance of section 123BB election.  

If the transferor made an election under section 123BB in respect of capital expenditure incurred by the transferor in respect of the property, this Subdivision applies as if the transferee had made an election under that section in respect of the capital expenditure of the transferee.

123BBA(8)   Rule where no section 123BB election made.  

If the transferor did not make an election under section 123BB in respect of capital expenditure incurred by the transferor in respect of the property, the transferee is not entitled to make an election under that section in respect of the capital expenditure of the transferee.

123BBA(9)   Subparagraphs 123B(1)(a)(i) and (ii) and paragraph 123B(1)(b) - inheritance of threshold conditions.  

If subparagraph 123B(1)(a)(i) or (ii) or paragraph 123B(1)(b) applied to the expenditure of a capital nature of the transferor in respect of the property, that paragraph or subparagraph has effect, in relation to the transferee and in relation to the property, as if the threshold conditions that were satisfied in relation to the transferor were satisfied in relation to the transferee.

123BBA(10)   Subsection (9) - threshold conditions.  

For the purposes of subsection (9), the following are taken to be threshold conditions in relation to expenditure in respect of property:


(a) a condition that the expenditure was incurred before, at or after a particular time;


(b) if the expenditure was incurred under a contract - a condition that the property was acquired under a contract that was entered into before, at or after a particular time.

123BBA(11)   Deduction where section 123BA election made by transferee.  

If:


(a) the transferee incurs capital expenditure referred to in subparagraph 123B(1)(a)(i) or (ii) in respect of the property; and


(b) the transferee elects that section 123BA applies in respect of the capital expenditure of the transferee; and


(c) apart from the disposal, a deduction (in this subsection called the notional deduction ) would have been allowable to the transferor under paragraph 123BA(3)(a) in respect of a particular year of income, being the year of income in which the disposal took place or a subsequent year of income;

the amount of the notional deduction is taken to be a deduction allowable under that paragraph to the transferee for the year of income concerned.

123BBA(12)   Recoupment of expenditure - consequential amendment of assessments.  

Section 170 does not prevent the amendment at any time of an assessment of the transferee where subsection 123A(2) has applied to:


(a) the transferor in respect of the property; or


(b) if there have been 2 or more prior successive applications of this section - one or more of the prior successive transferors in respect of the property.

123BBA(13)   Disposal by transferee where no roll-over relief - inheritance of deductions.  

If:


(a) after the disposal of the property to the transferee:


(i) the property is lost or destroyed; or

(ii) the transferee disposes of the property; or

(iii) the use of the property by the transferee primarily and principally for a purpose referred to in section 123A is otherwise terminated; and


(b) in the case of a disposal by the transferee - this section does not apply to the disposal;

then, for the purposes of the application of section 123C in relation to the loss, destruction, disposal or termination, the total of:


(c) the deductions allowed or allowable to the transferor under this Subdivision in relation to the property; and


(d) if there have been 2 or more prior successive applications of this section - the deductions allowed or allowable to the prior successive transferors under this Subdivision in relation to the property;

are taken to have been deductions allowed or allowable to the transferee under this Subdivision in relation to the property.

123BBA(14)   Disposal by transferee where no roll-over relief - inheritance of total expenditure of a capital nature.  

In spite of subsection (4), if:


(a) after the disposal of the property to the transferee:


(i) the property is lost or destroyed; or

(ii) the transferee disposes of the property; or

(iii) the use of the property by the transferee primarily and principally for a purpose referred to in section 123A is otherwise terminated; and


(b) in the case of a disposal by the transferee - this section does not apply to the disposal;

then, for the purposes of the application of section 123C in relation to the loss, destruction, disposal or termination, the total expenditure of a capital nature of the transferee in respect of the property is to be worked out as if the rule set out in subsection (15) had been applicable to:


(c) the disposal of the property by the transferor to the transferee; and


(d) if there have been 2 or more prior successive applications of this section - each prior successive disposal.

123BBA(15)   Rule referred to in subsection (14).  

The rule referred to in subsection (14) is that the transferee had acquired the property for a consideration equal to the total expenditure of a capital nature of the transferor in respect of the property.

123BBA(16)   Second or subsequent application of section - paragraph (1)(b) does not apply.  

If, apart from this subsection, this section has applied to the disposal of the property to the transferee, then, in working out whether this section applies to a subsequent disposal of the property by:


(a) the transferee; or


(b) one or more subsequent successive transferees;

this section has effect as if paragraph (1)(b) (which deals with deductions) had not been enacted.


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