Income Tax (Transitional Provisions) Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 126 - Roll-overs  

Subdivision 126-B - Transfer of life insurance business  

SECTION 126-160   Effects of roll-over  

126-160(1)    
A capital gain or capital loss the originating company makes from the CGT event is disregarded.

126-160(2)    
The first element of the cost base of the original asset or the replacement asset for the recipient company is the cost base of the original asset for the originating company just before the time of the CGT event.

126-160(3)    
The first element of the reduced cost base of the original asset or the replacement asset for the recipient company is worked out similarly.

126-160(4)    
For a case where the originating company creates a CGT asset in the recipient company, the first element of the asset ' s cost base (in the hands of the recipient company) is the amount applicable under this table. The first element of its reduced cost base is worked out similarly.

Creating a CGT asset
CGT event number	Applicable amount
D1	the incidental costs the originating company incurred that relate to the CGT event
D2	the expenditure the originating company incurred to grant the option
D3	the expenditure the originating company incurred to grant the right
F1	the expenditure the originating company incurred on the grant, renewal or extension of the lease

The expenditure can include giving property: see section 103-5 of the Income Tax Assessment Act 1997 .

126-160(5)    
If the originating company acquired the original asset before 20 September 1985, the recipient company is taken to have acquired the original asset or the replacement asset before that day.