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 104-198   Cost of acquisition of replacement asset or amount of fourth element expenditure, or both, not sufficient to cover disregarded capital gain: CGT event J6  

104-198(1)    
CGT event J6 happens if you choose a small business roll-over under Subdivision 152-E for a *CGT event that happens in relation to a *CGT asset in an income year and:

(a) by the end of the *replacement asset period, you have done either or both of the following:

(i) *acquired a replacement asset (the replacement asset );

(ii) incurred *fourth element expenditure in relation to a CGT asset (also the replacement asset ); and

(b) at the end of the replacement asset period, the replacement asset is your *active asset; and

(c) if the replacement asset is a *share in a company or an interest in a trust, at the end of the replacement asset period:

(i) you, or an entity *connected with you, are a *CGT concession stakeholder in the company or trust; or

(ii) CGT concession stakeholders in the company or trust have a *small business participation percentage in you of at least 90%; and

(d) the total (the amount incurred ) of the following, in relation to each replacement asset that satisfied paragraph (b) and, if applicable, paragraph (c), is less than the amount of the capital gain that you disregarded:

(i) the first element of the *cost base;

(ii) the *incidental costs you incurred (which can include giving property, see section 103-5 );

(iii) the amount of fourth element expenditure incurred.

Note:

You do not have to satisfy the basic conditions in Subdivision 152-A for the gain in relation to CGT event J6 (see subsection 152-305(4) ).

104-198(2)    

The time of the event is at the end of the *replacement asset period.

104-198(3)    
You make a capital gain equal to the difference between:

(a) the amount of the *capital gain that you disregarded under Subdivision 152-E ; and

(b) the amount incurred.

104-198(4)    

The *replacement asset period may be modified or extended as mentioned in section 104-190 .