INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17A - Roll-over relief for certain disposals of assets related to small businesses  

Subdivision B - How roll-over relief is available on the disposal of an asset  

SECTION 160ZZPW   APPLICATION OF NET ROLL-OVER AMOUNTS IF THE REPLACEMENT ASSETS INCLUDE BOTH GOODWILL AND ASSETS OTHER THAN GOODWILL  

160ZZPW(1)   Definition.  

In this section:

residual net roll-over amount
, in relation to a taxpayer in relation to a disposal year of income, means the sum of:

(a) the net goodwill roll-over amount applying to the taxpayer in respect of that year of income as reduced under paragraph (4)(c); and

(b) the net non-goodwill roll-over amount applying to the taxpayer in respect of that year of income.

160ZZPW(2)   Application of section.  

This section applies to a taxpayer in relation to a disposal year of income if the taxpayer nominates both one or more replacement goodwill assets and one or more replacement non-goodwill assets for the purposes of the application of this Division in respect of a net roll-over amount or net roll-over amounts applying to the taxpayer in respect of that year of income.

Note:

Replacement goodwill assets can only be nominated in respect of a net goodwill roll-over amount (see subsection 160ZZPT(3) ).

160ZZPW(3)   If total goodwill cost base is not less than net goodwill roll-over amount.  

If the total goodwill cost base in relation to the taxpayer in respect of the disposal year of income is equal to or greater than the net goodwill roll-over amount applying to the taxpayer in respect of that year of income:

(a) the taxpayer must apportion the whole of the net goodwill roll-over amount among the replacement assets that are nominated in respect of the net goodwill roll-over amount in such manner as the taxpayer determines but so that the amount apportioned to a particular asset does not exceed the sum of:

(i) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset; and

(ii) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset;

(b) if an amount is apportioned to an asset - the amount is to be applied, at the time of the acquisition of the asset by the taxpayer, in reduction of the following amounts in such proportions as the taxpayer determines:

(i) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset;

(ii) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset.

160ZZPW(4)   If total goodwill cost base is less than net goodwill roll-over amount.  

If the total goodwill cost base in relation to the taxpayer in respect of the disposal year of income is less than the net goodwill roll-over amount applying to the taxpayer in respect of that year of income:

(a) the taxpayer must apportion so much of the net goodwill roll-over amount as is equal to the total goodwill cost base among the replacement assets that are nominated in respect of the net goodwill roll-over amount so that the amount apportioned to a particular asset does not exceed the sum of:

(i) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset; and

(ii) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset; and

(b) if an amount is apportioned to an asset - the consideration in respect of the acquisition of the asset and the incidental costs to the taxpayer of the acquisition of the asset are each taken, at the time of the acquisition of the asset by the taxpayer, to be nil; and

(c) the net goodwill roll-over amount is taken to be reduced by an amount equal to the total goodwill cost base.

160ZZPW(5)   If total non-goodwill cost base is not less than residual net roll-over amount.  

If this section applies, the following provisions also have effect:

(a) the taxpayer must apportion the residual net roll-over amount among the nominated non-goodwill replacement assets in such manner as the taxpayer determines but so that the amount apportioned to a particular asset does not exceed the lesser of:

(i) the sum of the acquisition amounts set out in subsection (5B); and

(ii) if the asset is a share in a company or a unit in a unit trust - the maximum apportionment amount for the share or unit worked out under subsection (6);

(b) if an amount is apportioned to an asset that is not a depreciable asset - the amount is to be applied in reduction of the acquisition amounts for the asset in such proportions as the taxpayer determines;

(c) if an amount is apportioned to an asset that is a depreciable asset and section 160ZZPX does not apply in relation to the asset before it is disposed of - the amount is taken to be a capital gain that accrues to the taxpayer during the year of income in which the asset is disposed of;

(d) if the amount apportioned to assets under paragraph (a) is less than the residual net roll-over amount - an amount equal to the difference is taken to be a capital gain that accrued to the taxpayer during the disposal year of income.

160ZZPW(5A)   [When reductions made]  

The reductions set out in paragraph (5)(b) are taken to have been made at the time of the acquisition of the asset by the taxpayer.

160ZZPW(5B)   [Acquisition amount]  

The acquisition amounts for an asset are:

(a) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset; and

(b) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset; and

160ZZPW(6)   [Maximum apportionment amount]  

The maximum apportionment amount for a share in a particular company or a unit in a particular unit trust is:

Total market value of active assets

×

Market value of share or unit                       Total of market values of shares in the     company or units in the unit trust

where:

active assets are those assets of the company or trust that were active assets of the company or trust, as the case may be, at the time of the acquisition of the shares or units.

market value means the market value at that time.