Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 104 - CGT events  

Subdivision 104-J - CGT events relating to roll-overs  

SECTION 104-195   Trust failing to cease to exist after roll-over under Subdivision 124-N: CGT event J4  

104-195(1)    
CGT event J4 happens if:

(a) there is a roll-over under Subdivision 124-N for a trust *disposing of a *CGT asset to a company under a trust restructure; and

(b) the trust fails to cease to exist:

(i) within 6 months after the start of the *trust restructuring period; or

(ii) if that is not possible because of circumstances outside the control of the trustee - as soon as practicable after the end of that 6 month period; and

(c) the company owns the asset when the failure happens.

Example:

Circumstances would be outside the control of the trustee if the trustee is involved in litigation concerning the trust and cannot wind up the trust until the litigation is finished.

104-195(2)    
CGT event J4 also happens if:

(a) there is a roll-over under Subdivision 124-N for an entity (the shareholding entity ) receiving a *share in a company in exchange for a unit or interest in a trust under a trust restructure; and

(b) the trust fails to cease to exist:

(i) within 6 months after the start of the *trust restructuring period; or

(ii) if that is not possible because of circumstances outside the control of the trustee - as soon as practicable after the end of that 6 month period; and

(c) the shareholding entity owns the share when the failure happens.

104-195(3)    
The time of the event is when the failure to cease to exist happens.

104-195(4)    
The company makes a capital gain if the *CGT asset ' s *market value at the time the company *acquired the asset is more than its *cost base at that time. The company makes a capital loss if that market value is less than the asset ' s *reduced cost base at that time.

104-195(5)    
This Part and Part 3-3 apply to the company from just after the time of the event as if the first element of the *cost base and *reduced cost base of the asset were its *market value at the time the company *acquired the asset.

104-195(6)    
The shareholding entity makes a capital gain if the *share ' s *market value at the time the entity *acquired the share is more than its *cost base at that time. The shareholding entity makes a capital loss if that market value is less than the share ' s *reduced cost base at that time.

104-195(7)    
This Part and Part 3-3 apply to the shareholding entity from just after the time of the event as if the first element of the *cost base and *reduced cost base of the *share were its *market value at the time the entity *acquired the share.

Exception

104-195(8)    
This section does not apply to a *CGT asset acquired under a trust restructure that happened before the day on which the Taxation Laws Amendment Act (No. 4) 2002 received the Royal Assent.