CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-3
-
CAPITAL GAINS AND LOSSES: SPECIAL TOPICS
History
Part 3-3 inserted by No 46 of 1998.
Division 126
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Same-asset roll-overs
History
Div 126 inserted by No 46 of 1998.
Subdivision 126-G
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Transfer of assets between certain trusts
History
Subdiv 126-G inserted by No 19 of 2010, s 3 and Sch 1 item 9, applicable to CGT events happening on or after 1 November 2008. No 19 of 2010, s 3 and Sch 1 items 12 and 13 also contains the following transitional provisions:
Transitional: time for making mirror choices
(1)
Subsection
126-235(3)
of the
Income Tax Assessment Act 1997
does not apply if the other trust makes a mirror choice under a provision of a taxation law by:
(a)
6 months after the day this Act receives the Royal Assent
[
CCH Note: assent was gained 24 March 2010]; or
(b)
a later day allowed by the Commissioner of Taxation.
Note:
For this item to have effect, the other trust must still be able, under that provision of the taxation law, to make the mirror choice.
(2)
This item has effect in addition to subsection
126-235(4)
of the
Income Tax Assessment Act 1997
.
Transitional: deadline for giving information to beneficiaries
(1)
This item applies in relation to a roll-over chosen under Subdivision
126-G
of the
Income Tax Assessment Act 1997
if the transfer year for the roll-over is the transferring trust's 2008-09 income year.
(2)
Subsection
126-260(1)
of that Act has effect, in relation to the roll-over, as if the reference in that subsection to 3 months after the end of the transfer year were a reference to 6 months after the day this Act receives the Royal Assent
[
CCH Note: assent was gained 24 March 2010].
Operative provisions
SECTION 126-225
When a roll-over may be chosen
126-225(1)
A roll-over may be chosen for a *CGT asset (the
roll-over asset
) if:
(a)
the trustee of a trust (the
transferring trust
):
(i)
creates a trust (the
receiving trust
), by declaration or settlement, over one or more CGT assets that include the roll-over asset; or
(ii)
transfers the roll-over asset to an existing trust (the
receiving trust
);
at a particular time (the
transfer time
); and
(b)
if subparagraph (a)(ii) applies
-
the receiving trust has no CGT assets immediately before the transfer time, other than any or all of the following:
(i)
small amounts of cash or debt;
(ii)
its rights under an *arrangement, if (collectively) those rights only facilitate the transfer of assets to it from the transferring trust; and
(c)
just after the transfer time:
(i)
each of the trusts has the same beneficiaries; and
(ii)
the receiving trust has the same *classes of *membership interests that the transferring trust had just before, and has just after, the transfer time; and
(iii)
the sum of the *market values of each beneficiary
'
s membership interests of a particular class in both trusts is substantially the same as the sum of the market values, just before the transfer time, of the beneficiary
'
s membership interests of that class in both trusts; and
(d)
the requirement in section
126-230
is met; and
(e)
the exceptions in section
126-235
do not apply.
History
S 126-225(1) amended by No 133 of 2014, s 3 and Sch 1 item 38, by substituting para (b), applicable in relation to CGT events happening on or after 1 November 2008. No 133 of 2014, s 3 and Sch 1 item 40 contains the following transitional provision:
40 Transitional provision
-
transfers between certain trusts
40(1)
This item applies if:
(a)
a roll-over under Subdivision
126-G
of the
Income Tax Assessment Act 1997
is chosen after the commencement of this Schedule; and
(b)
the transfer time (within the meaning of paragraph
126-225(1)(a)
of that Act) for the roll-over happens during an income year ending before the commencement of this Schedule.
40(2)
Subsection
126-260(1)
of that Act applies to the trustee of the transferring trust as if the reference in that subsection to
"
within 3 months after the end of the transfer year
"
were a reference to
"
within 3 months after the time the roll-over is chosen
"
.
Para (b) formerly read:
(b)
if subparagraph (a)(ii) applies
-
the receiving trust has no CGT assets, other than small amounts of cash or debt, just before the transfer time; and
Exception if other roll-over assets already transferred
126-225(2)
However, paragraph (1)(b) does not apply if:
(a)
the roll-over asset is transferred to the receiving trust under an *arrangement; and
(b)
the roll-over asset was an asset of the transferring trust just before the arrangement was made; and
(c)
at least one other asset of the receiving trust:
(i)
is an asset for which a roll-over was obtained under this Subdivision for the trusts; and
(ii)
is an asset over which the receiving trust was created, or was transferred by the transferring trust to the receiving trust under the arrangement; and
(d)
the transfer time is in the income year for the transferring trust that includes the earliest transfer time (the
start time
) for the assets covered by paragraph (c).
Obtaining the roll-over
126-225(3)
The roll-over only happens if both the trustee of the transferring trust and the trustee of the receiving trust choose to obtain it.
History
S 126-225 inserted by No 19 of 2010, s 3 and Sch 1 item 9, applicable to CGT events happening on or after 1 November 2008. For transitional provisions, see note under Subdiv
126-G
heading.