INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 5A - Crown leases  

SECTION 160ZWA   ROLL-OVER OR CONVERSION OF CROWN LEASE  

160ZWA(1)   [Application of section]  

This section applies where:


(a) at a particular time, one or more Crown leases (in this section called the ``original Crown leases'' ) owned by a taxpayer expire or are surrendered;


(b) one or more fresh Crown leases (in this section called the ``new Crown leases'' ) or one or more freehold interests, or both, is or are granted to the taxpayer by way of any one or more of the following:


(i) the renewal of the original Crown leases, where the renewal is (whether by law, custom or otherwise) wholly or principally attributable to the taxpayer's prior ownership of the original Crown leases;

(ii) the extension of the term of the original Crown leases, where the extension is (whether by law, custom or otherwise) wholly or principally attributable to the taxpayer's prior ownership of the original Crown leases;

(iii) changing the purpose for which the land to which the original Crown leases related may be used;

(iv) in a case where the original Crown leases were not leases in perpetuity - the conversion of the original Crown leases to Crown leases in perpetuity;

(v) the conversion of the original Crown leases to freehold interests;

(vi) the consolidation, or the consolidation and division, of the original Crown leases;

(vii) the subdivision of the original Crown leases;

(viii) excising or relinquishing a part (which part is in this section called the ``excised area'') of the area of land to which the original Crown leases related;

(ix) expanding the area of land to which the original Crown leases related; and


(c) in the case of a taxpayer in the capacity of a trustee of a trust estate - immediately after the grant of the new Crown leases or the freehold interests, the taxpayer holds the new Crown leases or the freehold interests upon the same trust as the taxpayer held the original Crown leases.

160ZWA(2)   [Application of Pt IIIA in respect of original Crown leases]  

Subject to subsection (4), this Part (other than this section) does not apply in respect of the expiry or surrender of any of the original Crown leases.

160ZWA(3)   [Pre- and post-20/9/85 original Crown leases]  

For the purposes of this section:


(a) an original Crown lease acquired by the taxpayer before 20 September 1985 shall be taken to be a pre-20 September 1985 original Crown lease; and


(b) any other original Crown lease shall be taken to be a post-20 September 1985 original Crown lease.

160ZWA(4)   [Post-20/9/85 original Crown lease relating to excised area]  

Subject to this Part, if the taxpayer received, or was entitled to receive, any consideration in respect of the expiry or surrender of a post-20 September 1985 original Crown lease that related, in whole or in part, to the excised area:


(a) if the original Crown lease related wholly to the excised area - this Part applies in respect of the disposal of that Crown lease; and


(b) if the original Crown lease related only in part to the excised area - the taxpayer shall be taken, for the purposes of this Part, to have disposed of that part of that Crown lease that is attributable to the excised area.

160ZWA(5)   [New Crown lease or freehold interest wholly related to pre-20/9/85 original Crown lease land]  

If a particular new Crown lease or freehold interest relates wholly to land to which a pre-20 September 1985 original Crown lease related - the taxpayer shall be taken, for the purposes of this Part, to have acquired the new Crown lease or freehold interest before 20 September 1985.

160ZWA(6)   [New Crown lease wholly related to post-20/9/85 original Crown lease land]  

If a particular new Crown lease relates wholly to land to which a post-20 September 1985 original Crown lease related - the new Crown lease shall be taken, for the purposes of this section, to be a post-20 September 1985 new Crown lease.

160ZWA(7)   [Freehold interest wholly related to post-20/9/85 original Crown lease land]  

If a particular freehold interest relates wholly to land to which a post-20 September 1985 original Crown lease related - the freehold interest shall be taken, for the purposes of this section, to be a post-20 September 1985 freehold interest.

160ZWA(8)   [New Crown lease partly related to 2 or more different lands]  

If a particular new Crown lease relates partly to any 2 or more of the following:


(a) land to which a pre-20 September 1985 original Crown lease related;


(b) land to which a post-20 September 1985 original Crown lease related;


(c) other land;

the following provisions have effect:


(d) the new Crown lease shall be taken, for the purposes of this Part, to comprise 2 or 3 separate leases, as follows:


(i) the new Crown lease to the extent to which it relates to land to which a pre-20 September 1985 original Crown lease related;

(ii) the new Crown lease to the extent to which it relates to land to which a post-20 September 1985 original Crown lease related;

(iii) the new Crown lease to the extent to which it relates to other land;


(e) the taxpayer shall be treated, for the purposes of this Part, as if the taxpayer had acquired the lease referred to in subparagraph (d)(i) before 20 September 1985;


(f) the lease referred to in subparagraph (d)(ii) shall be taken, for the purposes of this section, to be a post-20 September 1985 new Crown lease;


(g) on the disposal of the actual new Crown lease, the consideration in respect of the disposal of the actual lease shall be apportioned between the separate leases.

160ZWA(9)   [Freehold interest partly related to 2 or more different lands]  

If a particular freehold interest relates partly to any 2 or more of the following:


(a) land to which a pre-20 September 1985 original Crown lease related;


(b) land to which a post-20 September 1985 original Crown lease related;


(c) other land;

the following provisions have effect:


(d) the freehold interest shall be taken, for the purposes of this Part, to comprise 2 or 3 separate freehold interests as follows:


(i) the freehold interest to the extent to which it relates to land to which a pre-20 September 1985 original Crown lease related;

(ii) the freehold interest to the extent to which it relates to land to which a post-20 September 1985 original Crown lease related;

(iii) the freehold interest to the extent to which it relates to other land;


(e) the taxpayer shall be treated, for the purposes of this Part, as if the taxpayer had acquired the freehold interest referred to in subparagraph (d)(i) before 20 September 1985;


(f) the freehold interest referred to in subparagraph (d)(ii) shall be taken, for the purposes of this section, to be a post-20 September 1985 freehold interest;


(g) on the disposal of the actual freehold interest, the consideration in respect of the disposal of the actual freehold interest shall be apportioned between the separate freehold interests.

160ZWA(10)   [Post-20/9/85 land asset]  

For the purposes of subsections (11) and (12), a post-20 September 1985 new Crown lease or a post-20 September 1985 freehold interest shall be taken to be a post-20 September 1985 land asset.

160ZWA(11)   [Determination of amount taken to have been paid for post-20/9/85 land asset]  

The taxpayer shall be taken to have paid or given as consideration in respect of the acquisition of a post-20 September 1985 land asset:


(a) for the purposes of ascertaining whether a capital gain accrued to the taxpayer in the event of a subsequent disposal of the land asset by the taxpayer - the amount calculated in accordance with the formula:


ICB of post CGT orig. leases ×       MV of land asset      
  MV of post CGT land assets


where:
  • ICB of post CGT orig. leases is the sum of the amounts that would have been the indexed cost bases to the taxpayer of post-20 September 1985 original Crown leases for the purposes of this Part if this Part had applied in respect of the expiry or surrender of the original Crown leases reduced, in a case where subsection (4) applies in relation to any of the post-20 September 1985 original Crown leases, by so much of those indexed cost bases as is attributable to the excised area concerned;
  • MV of land asset is the number of dollars in the market value of the land asset immediately after the acquisition of the land asset by the taxpayer; and
  • MV of post CGT land assets is the number of dollars in the market value of the post-20 September 1985 land assets immediately after the acquisition of the land assets by the taxpayer; or

  • (b) for the purposes of ascertaining whether the taxpayer incurred a capital loss in the event of a subsequent disposal of the land asset by the taxpayer - the amount calculated in accordance with the formula:


    RCB of post CGT orig. leases ×       MV of land asset      
      MV of post CGT land assets


    where:
  • RCB of post CGT orig. leases is the sum of the amounts that would have been the reduced cost bases to the taxpayer of post-20 September 1985 original Crown leases for the purposes of this Part if this Part had applied in respect of the expiry or surrender of the original Crown leases reduced, in a case where subsection (4) applies in relation to any of the post-20 September 1985 original Crown leases, by so much of those reduced cost bases as is attributable to the excised area concerned;
  • MV of land asset is the number of dollars in the market value of the land asset immediately after the acquisition of the land asset by the taxpayer; and
  • MV of post CGT land assets is the number of dollars in the market value of the post-20 September 1985 land assets immediately after the acquisition of the land assets by the taxpayer.
  • 160ZWA(12)   [Disposal of post-20/9/85 land asset]  

    If a post-20 September 1985 land asset is disposed of by the taxpayer within 12 months after the earliest day, being a day after 19 September 1985, on which any post-20 September 1985 original Crown lease was acquired by the taxpayer, the reference in paragraph (11)(a) to the indexed cost bases to the taxpayer of post-20 September 1985 original Crown leases is a reference to the cost bases to the taxpayer of the post-20 September 1985 original Crown leases.

    160ZWA(13)   [Commissioner's discretion where original area differs from new area]  

    Where:


    (a) the area of land (in this subsection called the ``original area'') to which the original Crown leases related differs from the area of land (in this subsection called the ``new area'') to which the new Crown leases or the freehold interests relate; and


    (b) having regard to all relevant circumstances, including:


    (i) the difference between the size of the original area and the size of the new area;

    (ii) the difference between:

    (A) the market value of the new Crown leases or the freehold interests immediately after the grant of the new Crown leases or freehold interests to the taxpayer; and

    (B) the amount that would have been the market value of the new Crown leases or freehold interests, immediately after the grant of the new Crown leases or freehold interests to the taxpayer, if the new Crown leases or freehold interests had been granted in respect of the original area instead of the new area;

    (iii) if land (in this subparagraph called the ``excepted land'') that formed part (whether a minor part or a significant part) of the original area is not included in the new area but land (in this subparagraph called the ``new land'') that did not form part of the original area is included in the new area - the circumstances that gave rise to the exclusion of the excepted land from, and the inclusion of the new land in, the new area and, in particular, (if applicable) the circumstance that the taxpayer sought, but was unable to secure, the inclusion of the excepted land and agreed to the inclusion of the new land only as a substitute for the excepted land; and

    (iv) in the case of the grant of new Crown leases - whether the new Crown leases were granted for the purpose of correcting errors or omissions;
    the Commissioner is satisfied that it would be unreasonable not to apply this subsection;

    the Commissioner may, for the purposes of subsections (5) to (9) (inclusive), to such extent as the Commissioner considers reasonable, treat a new Crown lease or a freehold interest as relating, in whole or in part, to land to which a particular original Crown lease related.

    160ZWA(14)   [``freehold interest'']  

    In this section:

    "freehold interest"
    means an estate in fee simple.

    160ZWA(15)   [Fresh lease]  

    Where:


    (a) a Crown lease (in this subsection called the ``original lease'') of land (in this subsection called the ``original land'') has been granted to a taxpayer;


    (b) after the grant of the original lease, the original land came to be vested in or held by a government authority; and


    (c) the government authority granted to the taxpayer under a statutory law of the Commonwealth, of a State or of a Territory a lease (in this subsection called the ``fresh lease'') of the original land, or of that land less an excised area or together with an additional area;

    then, for the purposes of this section, the fresh lease shall be taken to be a Crown lease and to have been granted by way of renewal of the original lease.

    160ZWA(16)   [Period between original lease and fresh lease]  

    If there was a period between the end of the term of the original lease referred to in subsection (15) and the beginning of the term of the fresh lease so referred to, that period shall not be taken to preclude the fresh lease from being regarded for the purposes of that subsection as a renewal of the original lease provided that the taxpayer concerned continued in occupation of the original land during that period under a permission, licence or authority granted by the relevant government authority pending the grant of the fresh lease.


     

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