Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 126 - Same-asset roll-overs  

Subdivision 126-G - Transfer of assets between certain trusts  

Operative provisions

SECTION 126-235   Exceptions for roll-over  

Foreign trusts

126-235(1)    
An exception applies for a *CGT asset if:

(a) the receiving trust is a *foreign trust for CGT purposes for the income year that includes the transfer time; and

(b) the roll-over asset is not *taxable Australian property just after the transfer time.

Public trading trusts

126-235(2)    

Another exception applies if either trust is a trust to which section 102S of the Income Tax Assessment Act 1936 applies for the income year that includes the transfer time.

Choices

126-235(3)    
Another exception applies if, just after the transfer time:

(a) a choice (however described) under a provision of a *taxation law is in force for either of the trusts in relation to particular circumstances; and

(b) the same choice (however described) under that provision for the other trust in relation to those circumstances (a mirror choice ) is not also in force; and

(c) the absence of a mirror choice would or could have an ongoing effect on the calculation of an entity's *net income, or taxable income, for:

(i) the entity's income year that includes the transfer time; or

(ii) a later income year.

126-235(4)    
However, the exception in subsection (3) does not apply if:

(a) the other trust makes a mirror choice before the first time after the transfer time when the absence of the mirror choice would affect the calculation of an entity's *net income, or taxable income, for an income year; or

(b) it would not be reasonable for subsection (3) to apply.

Note:

For paragraph (a), the other trust must still be able, under the relevant provision of the taxation law, to make the mirror choice.

126-235(5)    
If, just after the transfer time:

(a) a choice (however described) referred to in paragraph (3)(a) is in force for either of the trusts (the first choice ); and

(b) a provision of a *taxation law:

(i) prevents the revocation or variation of that choice; or

(ii) sets out a consequence for an entity if that choice is revoked or varied;

that provision is taken to apply for a mirror choice, in force for the other trust at or after that time, in a way corresponding to the way in which it applies for the first choice.

Note:

For example, if the provision sets out consequences that flow from the revocation of the first choice, then those consequences will also flow if the mirror choice is revoked.