Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 112 - Modifications to cost base and reduced cost base  

Subdivision 112-A - General modifications  

SECTION 112-25   Split, changed or merged assets  
Split or changed assets

112-25(1)    
This section sets out what happens if:

(a) a *CGT asset (the original asset ) is split into 2 or more assets (the new assets ); or

(b) a *CGT asset (also the original asset ) changes in whole or in part into an asset (also the new asset ) of a different nature;

and you are the beneficial owner of the original asset and each new asset.

Example:

You subdivide a block of land into 3 separate blocks. Each of those blocks is a new asset .

112-25(2)    
The splitting or change is not a *CGT event.

112-25(3)    
You work out the *cost base and *reduced cost base of each new asset as follows: Method statement

Merged assets

112-25(4)    
If 2 or more *CGT assets (the original assets ) are merged into a single asset (the new asset ) and you are the beneficial owner of the original assets and the new asset:

(a) the merger is not a *CGT event; and

(b) each element of the *cost base and *reduced cost base of the new asset (at the time of the merging) is the sum of the corresponding elements of each original asset.