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-A - Marriage or relationship breakdowns  

SECTION 126-15   CGT event involving company or trustee  

126-15(1)  
There are the roll-over consequences in section 126-5 if the trigger event involves a company (the transferor ) or a trustee (also the transferor ) and a *spouse or former spouse (the transferee ) of another individual because of:


(a) a court order under the Family Law Act 1975 or under a *State law, *Territory law or *foreign law relating to breakdowns of relationships between spouses; or


(b) a maintenance agreement approved by a court under section 87 of the Family Law Act 1975 or a corresponding agreement approved by a court under a corresponding *foreign law; or


(c) (Repealed by No 144 of 2008)


(d) something done under:


(i) a financial agreement made under Part VIIIA of the Family Law Act 1975 that is binding because of section 90G of that Act; or

(ii) a corresponding written agreement that is binding because of a corresponding foreign law; or


(da) something done under:


(i) a Part VIIIAB financial agreement (within the meaning of the Family Law Act 1975 ) that is binding because of section 90UJ of that Act; or

(ii) a corresponding written agreement that is binding because of a corresponding foreign law; or


(e) something done under:


(i) an award made in an arbitration referred to in section 13H of the Family Law Act 1975 ; or

(ii) a corresponding award made in an arbitration under a corresponding State law, Territory law or foreign law; or


(f) something done under a written agreement:


(i) that is binding because of a State law, Territory law or foreign law relating to breakdowns of relationships between spouses; and

(ii) that, because of such a law, prevents a court making an order about matters to which the agreement applies, or that is inconsistent with the terms of the agreement in relation to those matters, unless the agreement is varied or set aside.

126-15(2)  
There are other consequences if:


(a) just before the time of the trigger event, an entity (including the transferee) owned another *CGT asset of a kind covered by this table; and


(b) the entity *acquired it on or after 20 September 1985; and


(c) a *CGT event happens in relation to it.


Relevant CGT assets
Item For this transferor: The entity can own these assets:
1 Company (a) a *share in the company; or
(b) a loan to the company; or
(c) an indirect interest (through one or more interposed companies or trusts) in a *share in, or loan to, the company
2 Trustee (a) an interest or unit in the trust; or
(b) a loan to the trustee; or
(c) an indirect interest (through one or more interposed companies or trusts) in an interest or unit in the trust or in a loan to the trustee

Example:

An individual owns all the shares in a company. The company owns land. The individual ' s marriage breaks down. The Family Court orders that the company transfer the land it owns to the individual ' s spouse. The individual later sells the shares.

126-15(3)  


The *cost base and *reduced cost base of the other asset are reduced by an amount that reasonably reflects the fall in its *market value because of the trigger event. The reduction occurs at the time of the trigger event.

126-15(4)  
If the entity owning the other asset is also the transferee, the *cost base and *reduced cost base of the other asset are then increased by any amount that is included in the entity ' s assessable income for any income year because of the trigger event.

Note:

The reduced cost base may be modified for a roll-over happening after a demerger: see section 125-170 .

126-15(5)  


There is no roll-over because of paragraph (1)(d), (da) or (f) unless the conditions set out in section 126-25 are met.

 

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