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-A - Disposal or creation of assets by an individual or trustee to a wholly-owned company  

When is a roll-over available

SECTION 122-35   What if the company undertakes to discharge a liability (disposal case)  
Disposal of a CGT asset

122-35(1)    

One of the requirements in this table must be satisfied if:

(a) you *dispose of a *CGT asset; and

(b) the company undertakes to discharge one or more liabilities in respect of it.

(The *market value, or the *cost base, of an asset is worked out when you disposed of it.)

What amount the liabilities cannot exceed
Item	In this situation:	The liabilities cannot exceed:
1	You *acquired the asset on or after 20 September 1985	The *cost base of the asset
.
2	You *acquired the asset before 20 September 1985	The *market value of the asset

Note:

There are rules for working out what are the liabilities in respect of an asset: see section 122-37 .

Disposal of all the assets of a business

122-35(2)    

One of the requirements in this table must be satisfied if:

(a) you *dispose of all the assets of a *business; and

(b) the company undertakes to discharge one or more liabilities in respect of the assets of the business.

(The *market value, or the *cost base, of an asset is worked out when you disposed of it.)

What amount the liabilities cannot exceed
Item	In this situation:	The liabilities cannot exceed:
1	You *acquired all the assets on or after 20 September 1985	The sum of the *market values of the *precluded assets and the *cost bases of the other assets
.
2	You *acquired all the assets before 20 September 1985	The sum of the *market values of the assets
.
3	You *acquired at least one asset on or after 20 September 1985 and at least one before that day	For liabilities in respect of assets you *acquired on or after that day - the sum of the *market values of the *precluded assets and the *cost bases of the other assets;
		For liabilities in respect of assets you *acquired before that day - the sum of the market values of those assets