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  

Replacement-asset roll-over for a creation case

SECTION 122-65   Creation of asset  

122-65(1)    
If you choose a roll-over, a *capital gain or *capital loss you make from the trigger event is disregarded.

122-65(2)    
The first element of each *share's *cost base is the amount applicable under this table divided by the number of shares. The first element of each share's *reduced cost base is worked out similarly.

Creation case
Event No.	Applicable amount
D1	the *incidental costs you incurred that relate to the trigger event
.
D2	the expenditure you incurred to grant the option
.
D3	the expenditure you incurred to grant the right
.
F1	the expenditure you incurred on the grant, renewal or extension of the lease

The expenditure can include a transfer of property: see section 103-5 .

Example:

Bill grants a licence (CGT event D1) to Tiffin Pty Ltd (a company he owns). The company issues him with 2 additional shares. He incurs legal expenses of $1,000 to grant the licence.

Bill's cost base for each of the shares is $500.