Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 124 - Replacement-asset roll-overs  

Subdivision 124-B - Asset compulsorily acquired, lost or destroyed  

The consequences of a roll-over being available

SECTION 124-90   Consequences for receiving an asset  

124-90(1)  
If you receive another *CGT asset for the event happening, there are these consequences if you choose to obtain a roll-over.

124-90(2)  
A *capital gain you make from the original asset is disregarded.

124-90(3)  
If you *acquired the original asset on or after 20 September 1985:


(a) the first element of the other asset's *cost base is the original asset's cost base at the time of the event; and


(b) the first element of the other asset's *reduced cost base is the original asset's reduced cost base at the time of the event.

Note:

There are special indexation rules for roll-overs: see Division 114 .

Example:

Steven bought land in 1999 for $100,000. In 2001 the government compulsorily acquires the land and gives him new land in return.

A capital gain he makes from the original land is disregarded. Suppose the original land's cost base when it is acquired is $120,000. The first element of the new land's cost base becomes $120,000.

124-90(4)  
If you acquired the original asset before 20 September 1985, you are taken to have *acquired the other asset before that day.


View surrounding sectionsView surrounding sectionsBack to top


This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.