INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 73F   SECTION 73B ROLL-OVER RELIEF ON DISPOSAL OF BUILDING ETC. TO ANOTHER MEMBER OF SAME WHOLLY-OWNED GROUP  

73F(1)   Meaning of ``unit''.  

In this section:

"unit"
means a building or an extension, alteration or improvement to a building.

73F(2)   Roll-over relief where CGT roll-over relief allowed.  

This section applies to the disposal of a unit by an eligible company (in this section called the ``transferor'' ) to another eligible company (in this section called the ``transferee'' ) if:

(a) the disposal involves a CGT event for which there is a roll-over under Subdivision 126-B of the Income Tax Assessment Act 1997 , as in force before the amendments made to that Subdivision by the New Business Tax System (Consolidation) Act (No 1) 2002 ; and

(b) subject to subsection (14), a deduction or deductions have been allowed or are allowable under subsection 73B(17) to the transferor in respect of the unit or would have been allowed or allowable if the company had not chosen a tax offset under section 73I .

73F(3)   No balancing charges.  

Subsection 73B(27) does not apply in respect of the disposal of the unit by the transferor.

73F(4)   5-year deduction disallowance rule does not apply.  

Subsection 73B(28) does not apply in respect of the disposal of the unit by the transferor.

73F(5)   Subsection 73B(4) definition of ``qualifying building expenditure'' not applicable to transferee.  

Subsection 73B(4) does not apply to the transferee in relation to the unit.

73F(6)   Transferee to inherit transferor's qualifying building expenditure.  

If:

(a) immediately after the disposal took place, the transferee commences to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities; and

(b) apart from the disposal, there would have been an amount of qualifying building expenditure in relation to the transferor in relation to:

(i) the year of income of the transferor in which the disposal took place; or

(ii) the first subsequent year of income of the transferor;

then, subject to subsection 73B(5) , section 73B and this section have effect as if an amount equal to that amount were taken:

(c) to have been incurred by the transferee in the acquisition of the unit; and

(d) to be an amount of qualifying building expenditure in relation to the transferee in relation to:

(i) if subparagraph (b)(i) applies - the year of income of the transferee in which the disposal took place; and

(ii) if subparagraph (b)(ii) applies - the first subsequent year of income of the transferee.

73F(7)   Pre-21 November 1987 rule not applicable to transferee.  

Subsection 73B(5A) does not apply in relation to the acquisition of the unit by the transferee.

73F(8)   Modification of 5-year deduction disallowance rule.  

A reference in subsection 73B(28) to the day on which the transferee commenced to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities is to be read as a reference to:

(a) the day on which the transferor first used the unit exclusively for the purpose of the carrying on by or on behalf of the transferor of research and development activities; or

(b) if there have been 2 or more prior successive applications of this section - the earliest day on which a prior successive transferor first used the unit exclusively for the purpose of the carrying on by or on behalf of the prior successive transferor of research and development activities.

73F(9)   Deemed cessation of use by transferee - 5-year deduction disallowance rule.  

For the purposes of the application of subsection 73B(28) and subsection (10) of this section to the transferee, if, immediately after the disposal of the property to the transferee took place, the transferee did not commence to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities, the transferee is taken to have ceased to use the unit for that purpose immediately after the disposal took place.

73F(10)   Adjustments where 5-year deduction disallowance rule applies.  

If:

(a) after the disposal of the unit to the transferee, the transferee:

(i) disposes of the unit; or

(ii) ceases to use the unit exclusively for the purpose of the carrying on by or on behalf of the transferee of research and development activities; and

(b) subsection 73B(28) applies in relation to the disposal of the unit by the transferee or in relation to the cessation of use by the transferee;

then:

(c) the transferee's assessable income of the year of income in which the acquisition of the unit by the transferee took place includes:

(i) the total amount allowed or allowable as deductions to the transferor under subsection 73B(17) in relation to the unit; or

(ii) if there have been 2 or more prior successive applications of this section - the total amount allowed or allowable as deductions to the prior successive transferors under subsection 73B(17) in relation to the unit; and

(d) the following amounts are allowable deductions to the transferee for the year of income in which the acquisition of the unit by the transferee took place:

(i) the total amount of the deductions (if any) that would have been allowable to the transferor under section 75B or 124JA of this Act, or Division 10 , 10AAA , 10AA or 10D of this Part, or Division 43 or the former Subdivision 330-A, 330-C or 330-H of the Income Tax Assessment Act 1997 , or under section 40-730 , or 40-830 (because of subsection 40-840(1) ) of that Act, in relation to the unit if section 73B had not been enacted; or

(ii) if there have been 2 or more prior successive applications of this section - the total amount of the deductions (if any) that would have been allowable to the prior successive transferors under section 75B or 124JA of this Act, or Division 10 , 10AAA , 10AA or 10D of this Part, or Division 43 or the former Subdivision 330-A, 330-C or 330-H of the Income Tax Assessment Act 1997 , or under section 40-730 , or 40-830 (because of subsection 40-840(1) ) of that Act, in relation to the unit if section 73B had not been enacted; and

(e) for the purposes of the application of section 75B or 124JA of this Act, or Division 10 , 10AAA , 10AA or 10D of this Part, or Division 43 or the former Subdivision 330-A, 330-C or 330-H of the Income Tax Assessment Act 1997 , or under section 40-730 , or 40-830 (because of subsection 40-840(1) ) of that Act to the transferee in relation to the unit:

(i) whichever of the following is applicable:

(A) the expenditure incurred by the transferor in the acquisition or construction of the unit;

(B) if there have been 2 or more prior successive applications of this section - the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;

is taken to have been expenditure incurred by the transferee in the acquisition of the unit; and

(ii) a deduction allowable to the transferee under paragraph (d) of this subsection in relation to the unit is taken to be a deduction allowable to the transferee in relation to the unit under section 75B or 124JA of this Act, or Division 10 , 10AAA , 10AA or 10D of this Part, or Division 43 or the former Subdivision 330-A, 330-C or 330-H of the Income Tax Assessment Act 1997 , or under section 40-730 , or 40-830 (because of subsection 40-840(1) ) of that Act, as the case requires.

73F(11)   Disposal by transferee where no roll-over relief - inheritance of transferor's deductions.  

If:

(a) after the disposal of the unit to the transferee, the transferee disposes of the unit; and

(b) this section does not apply to the disposal by the transferee; and

(c) subsection 73B(27) applies to the disposal by the transferee;

then, for the purposes of the application of subsection 73B(27) in relation to the disposal:

(d) which of the following is applicable:

(i) the expenditure incurred by the transferor in the acquisition or construction of the unit;

(ii) if there have been 2 or more prior successive applications of this section - the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;

is taken to have been expenditure incurred by the transferee in the acquisition of the unit; and

(e) the total of:

(i) the amounts that would, apart from section 73B , have been allowed or allowable as deductions to the transferor under Division 10D of this Part, or Division 43 of the Income Tax Assessment Act 1997 , in respect of the expenditure of the transferor in the acquisition or construction of the unit; and

(ii) if there have been 2 or more prior successive applications of this section - the amounts that would, apart from section 73B , have been allowed or allowable as deductions to the prior successive transferors under Division 10D of this Part, or Division 43 of the Income Tax Assessment Act 1997 , in respect of the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;

are taken to have been amounts that would, apart from section 73B , have been allowed or allowable as deductions to the transferee under Division 10D of this Part, or Division 43 of the Income Tax Assessment Act 1997 , in respect of expenditure incurred by the transferee in the acquisition of the unit.

73F(12)   Destruction of building etc. - inheritance of transferor's deductions.  

If, after the disposal of the unit to the transferee, the unit, or a part of the unit, is destroyed, then, for the purposes of the application of subsection 73B(25) or (26) , as the case may be, in relation to the destruction:

(a) whichever of the following is applicable:

(i) the expenditure incurred by the transferor in the acquisition or construction of the unit;

(ii) if there have been 2 or more prior successive applications of this section - the expenditure incurred by the earliest prior successive transferor in the acquisition or construction of the unit;

is taken to have been expenditure incurred by the transferee in the acquisition of the unit; and

(b) the total of:

(i) the amounts allowed or allowable as deductions to the transferor under subsection 73B(17) in relation to the unit; or

(ii) if there have been 2 or more prior successive applications of this section - the amounts allowed or allowable as deductions to the prior successive transferors under subsection 73B(17) in relation to the unit;

are taken to have been amounts allowed or allowable to the transferee as deductions under subsection 73B(17) in relation to the unit.

73F(13)   Recoupment of expenditure - consequential amendment of assessments.  

Section 170 does not prevent the amendment at any time of an assessment of the transferee where section 73C or 73D has applied to:

(a) the transferor in respect of the unit; or

(b) if there have been 2 or more prior successive applications of this section - any of the prior successive transferors in respect of the unit.

73F(14)   Second or subsequent application of section - paragraph (2)(b) does not apply.  

If, apart for this subsection, this section has applied to the disposal of the unit to the transferee, then, in working out whether this section applies to a subsequent disposal of the unit by:

(a) the transferee; or

(b) one or more subsequent successive transferees;

this section has effect as if paragraph (2)(b) (which deals with deductions) had not been enacted.

73F(15)   Interpretation.  

For the purposes of interpretation, this section is to be construed as if it were part of section 73B .