Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

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

View history note

Division 152 - Small business relief

View history reference

View history note

Subdivision 152-E - Small business roll-over

View history reference

Operative provisions

SECTION 152-420 Rules where an individual who has obtained a roll-over dies

View history reference

152-420(1)
This section applies if:

(a) a replacement asset, or an asset in relation to which *fourth element expenditure has been incurred, formed part of the estate of an individual who has died; and

(b) either or both of the following apply:

(i) the asset has devolved to the deceased ' s *legal personal representative;

(ii) the asset has *passed to a beneficiary of the deceased; and

(c) a change covered by subsection 104-185(2) or (3) did not happen while the deceased owned it or, if the asset has passed to a beneficiary, while the asset was in the hands of the deceased ' s legal personal representative.

152-420(2)
For the purposes of this Subdivision, anything done or not done by the deceased in relation to the asset is treated as though it had been done or not done by the *legal personal representative.

152-420(3)
For the purposes of this Subdivision, if the asset has *passed to a beneficiary, anything done or not done by the deceased or by the deceased ' s *legal personal representative (including because of the operation of subsection (2)) in relation to the asset is treated as though it had been done or not done by the beneficiary.

View history note

History

S 152-420 substituted by No 55 of 2007 , s 3 and Sch 1 item 57, applicable to CGT events happening in the 2006-07 income year or later income years. S 152-420 formerly read:

SECTION 152-420 Replacement asset conditions
152-420(1)
For an asset to be eligible to be a replacement asset, you must *acquire it during the period starting one year before, and ending 2 years after, the happening of the last *CGT event in the income year for which you obtain the small business roll-over.

Extension of time if all reasonable steps taken

152-420(2)
This time limit does not apply to the extent that your *capital proceeds for the *CGT event are increased under subsection 116-45(2) after that time is up. Instead, you have until 12 months after you receive those additional proceeds to *acquire a replacement asset the first and second elements of the *cost base of which are at least equal to the value of those additional proceeds.
Note 1:

If you do not acquire a replacement asset with a sufficiently large cost base within the new time limit, your roll-over will be reduced accordingly under section 152-415 .

Note 2:

Section 116-45 applies if you do not receive your capital proceeds despite having taken all reasonable steps to get them.

152-420(3)
The Commissioner may extend the time limits under subsections (1) and (2).

Type of replacement asset allowed

152-420(4)
A replacement asset must be an *active asset when it is *acquired or an active asset by the end of 2 years after the last *CGT event during the year for which you choose a small business roll-over.
Note:

If a replacement asset is an active asset and its status subsequently changes, you may make a capital gain: see section 104-185 (CGT event J2). Special rules apply if you die: see section 152-425 .

152-420(5)
If a replacement asset is a *share in a company or an interest in a trust, you, or an entity *connected with you, must be a *controlling individual of the company or trust just after you *acquire the share or interest.
Example:

Joseph owns 50% of the shares in Company A and Company B. He is therefore a controlling individual of the companies (see section 152-55 ). The companies are connected with Joseph (see section 152-30 ) because he controls both of them.

Company A owns land which it leases to Joseph for use in a business. It sells the land at a profit and buys shares in Company B.

The replacement asset test is satisfied because Joseph is connected with Company A and is a controlling individual of Company B.

Note:

If a replacement asset is a share in a company and the status of the company changes, or you or an entity connected with you ceases to be its controlling individual, you may make a capital gain: see section 104-190 (CGT event J3). Special rules apply if you die: see section 152-425 .

S 152-420 inserted by No 165 of 1999 (as amended by No 173 of 2000).

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.