Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 122 - Roll-over for the disposal of assets to, or the creation of assets in, a wholly-owned company  

Subdivision 122-B - Disposal or creation of assets by partners to a wholly-owned company  

When is a roll-over available

SECTION 122-125  

122-125   Disposal or creation of assets - wholly-owned company  
All of the partners in a partnership can choose to obtain a roll-over if one of the * CGT events (the trigger event ) specified in this table happens involving the partners and a company in the circumstances set out in sections 122-130 to 122-140 .

Relevant * CGT events
Event No.	What the partners do
A1	* Dispose of their interests in a * CGT asset of the partnership, or all the assets of a business carried on by the partnership, to the company
.
D1	Create contractual or other rights in the company
.
D2	Grant an option to the company
.
D3	Grant the company a right to income from mining
.
F1	Grant a lease to the company, or renew or extend a lease

Note 1:

The roll-over starts at section 122-150 .

Note 2:

Section 103-25 tells you when you have to make the choice.

Example:

Michael and Sandra operate a fish shop in partnership. They agree to incorporate the business so they dispose of their interests in all its assets to a company. They are the only shareholders of the company.