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-B - Companies in the same wholly-owned group  

Operative provisions

SECTION 126-50   Requirements for roll-over  

126-50(1)  
The originating company and recipient company must be members of the same *wholly-owned group at the time of the trigger event.

Note:

This requirement is taken to be satisfied in the case of the transfer of the life insurance business of a life insurance company: see section 121AS of the Income Tax Assessment Act 1936 .

126-50(2)  


The *CGT asset involved (the roll-over asset ) must not be:


(a) *trading stock of the recipient company just after the time of the trigger event; or


(b) a *registered emissions unit *held by the recipient company just after the time of the trigger event.

126-50(3)  
If:


(a) the roll-over asset is a right or *convertible interest referred to in Division 130 , or an option referred to in Division 134 , or an *exchangeable interest; and


(b) the recipient company *acquires another *CGT asset by exercising the right or option or by converting the convertible interest or in exchange for the disposal or redemption of the exchangeable interest;

the other asset cannot become *trading stock of the recipient company just after the recipient company acquired it.

126-50(3A)  


If:


(a) the roll-over asset is an option referred to in Division 134 ; and


(b) the recipient company *acquires another *CGT asset by exercising the option;

the other asset cannot become a *registered emissions unit *held by the recipient company just after the recipient company acquired it.

126-50(4)  
The *ordinary income and *statutory income of the recipient company must not be exempt from income tax because it is an *exempt entity for the income year of the trigger event.

126-50(5)  


The requirements in one of the items in this table must be satisfied.


Additional requirements
Item At the time of the trigger event the originating company must be: At the time of the trigger event the recipient company must be: The roll-over asset must be taxable Australian property:
1 Either:

(a) a foreign resident; or

(b) an Australian resident but not a *prescribed dual resident
A foreign resident Either:

(a) just before and just after the trigger event, for a disposal case; or

(b) just after that event, for a creation case
2 A foreign resident An Australian resident but not a *prescribed dual resident Either:

(a) just before the trigger event, for a disposal case; or

(b) just after that event, for a creation case

126-50(6)  


If the originating company or the recipient company is an Australian resident at the time of the trigger event, that company must:


(a) be a *member of a *consolidated group or *MEC group at that time; or


(b) not be a member of a *consolidatable group at that time.

126-50(7)  


If the originating company is a foreign resident, it must not have *acquired the *CGT asset described in subsection (8) because of:


(a) a single *CGT event giving rise to a roll-over under a previous application of this Subdivision (as amended by the New Business Tax System (Consolidation) Act (No. 1) 2002 ) involving an Australian resident originating company other than the company that is the recipient company for the current application of this Subdivision; or


(b) a series (whether or not it is the longest possible series) of consecutive CGT events giving rise to roll-overs under previous applications of this Subdivision (as amended by the New Business Tax System (Consolidation) Act (No 1) 2002) , the earliest involving an Australian resident originating company other than the company that is the recipient company for the current application of this Subdivision.

126-50(8)  


Subsection (7) operates in relation to the *CGT asset:


(a) that was involved in the trigger event in a disposal case; or


(b) because of which the originating company was able to create the CGT asset that was involved in the trigger event in a creation case.

126-50(9)  


Subsection (7) does not apply if each of the following companies mentioned in that subsection:


(a) the recipient company for the roll-over under the current application of this Subdivision;


(b) the Australian resident originating company for the roll-over under:


(i) for paragraph (7)(a) - the previous application of this Subdivision; or

(ii) for paragraph (7)(b) - the earliest previous application of this Subdivision for that series of consecutive *CGT events;

was, at the time of its roll-over, the *head company of the same *MEC group.


 

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