INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 2 - Application  

SECTION 160P   COMPOSITE ASSETS  

160P(1)   [Demolition of building and erection of new building]  

Where:

(a) land on which a building is erected was acquired by a taxpayer before 20 September 1985;

(b) after the acquisition of the land by the taxpayer the building was demolished and a new building was constructed on the land in replacement of the demolished building; and

(c) if the new building were a separate asset from the land, the new building would be taken for the purposes of this Part to have been acquired by the taxpayer on or after 20 September 1985;

the new building shall be deemed for the purposes of this Part to be an asset separate from the land.

160P(2)   [Construction of building on vacant land]  

Where:

(a) land was acquired by a taxpayer before 20 September 1985;

(b) after the acquisition of the land by the taxpayer a building was constructed on the land; and

(c) if the building were a separate asset from the land, the building would be taken for the purposes of this Part to have been acquired by the taxpayer on or after 20 September 1985;

the building shall be deemed for the purposes of this Part to be an asset separate from the land.

160P(3)   [Acquisition of adjacent land]  

Where:

(a) land was acquired by a taxpayer before 20 September 1985; and

(b) on or after that date the taxpayer acquired land (whether or not a building was or is erected on that last-mentioned land) adjacent to the first-mentioned land;

the adjacent land shall be deemed for the purposes of this Part to be a separate asset from the first-mentioned land.

160P(4)   [Building or improvement a separate asset]  

Where a building or other improvement of a capital nature made to land is treated for the purposes of this Act other than this Part as an asset separate from the land, the building or other improvement shall be deemed for the purposes of this Part to be a separate asset from the land.

160P(5)   [Part of building a separate asset]  

Where an asset forming part of a building is treated for the purposes of this Act other than this Part as an asset separate from the building, the asset shall be deemed for the purposes of this Part to be a separate asset from the building.

160P(6)   [Capital improvement to asset]  

Where:

(a) an asset (other than a periodic roll-over asset) acquired by a taxpayer before 20 September 1985 has been disposed of on or after that date;

(b) an improvement of a capital nature to the asset was made after the taxpayer acquired the asset;

(c) if the improvement were a separate asset from the asset to which it was made:

(i) the improvement would be taken for the purposes of this Part to have been acquired by the taxpayer on or after 20 September 1985; and

(ii) subject to section 160Q , the indexed cost base to the taxpayer of the improvement would exceed $50,000; and

(d) the amount of the indexed cost base referred to in subparagraph (c)(ii) exceeds 5% of the consideration in respect of the disposal of the asset to which the improvement was made;

the improvement shall be deemed for the purposes of this Part to be an asset separate from the asset to which the improvement was made.

160P(6A)   [Capital improvement to periodic roll-over asset]  

Where:

(a) a periodic roll-over asset (in this subsection called the ``actual asset'' ) acquired by a taxpayer before 20 September 1985 has been disposed of on or after that date;

(b) if it were assumed that:

(i) the actual asset; and

(ii) all the predecessor assets of the actual asset;

together constituted a single asset (in this subsection called the ``overall asset'' ), an act or thing done in relation to the actual asset or any of the predecessor assets after the taxpayer first acquired any of the predecessor assets would constitute an improvement of a capital nature to the overall asset;

(c) if the improvement were a separate asset from the overall asset:

(i) the improvement would be taken, for the purposes of this Part, to have been acquired by the taxpayer on or after 20 September 1985; and

(ii) the indexed cost base to the taxpayer of the improvement would exceed the amount applicable for the purposes of subparagraph (6)(c)(ii) in relation to the year of income in which the actual asset was disposed of; and

(d) the amount of the indexed cost base referred to in subparagraph (c)(ii) exceeds 5% of the consideration in respect of the disposal of the actual asset;

the improvement shall be taken, for the purposes of this Part, to be an asset separate from the actual asset and each of those predecessor assets.

160P(7)   [Apportionment of disposal consideration]  

On the disposal of an asset that is, by this section, deemed for the purposes of this Part to comprise two or more separate assets, the consideration in respect of the disposal of the first-mentioned asset shall be apportioned between the separate assets.

160P(8)   [Single assets]  

Except as provided by this section, land, and any building or other improvement made to the land, shall be deemed for the purposes of this Part to be a single asset.

160P(9)   [Predecessor assets]  

For the purposes of this section:

(a) an asset is a predecessor of a second asset if the second asset replaced the first-mentioned asset in circumstances of a kind referred to in a periodic roll-over provision; and

(b) where there is a series of acquisitions of assets such that each asset replaced a previously acquired asset in circumstances of a kind referred to in a periodic roll-over provision, each of the assets involved in the series (other than the last asset to be acquired) shall be taken to be a predecessor of the last asset to be acquired.

160P(10)   [Definitions]  

In this section:

"periodic roll-over asset"
means an asset to which a periodic roll-over provision applies;

"periodic roll-over provision"
means section 160ZWA , 160ZZF or 160ZZPE.