Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-3
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CAPITAL GAINS AND LOSSES: SPECIAL TOPICS
Division 122
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Roll-over for the disposal of assets to, or the creation of assets in, a wholly-owned company
Subdivision 122-B
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Disposal or creation of assets by partners to a wholly-owned company
When is a roll-over available
SECTION 122-135 Other requirements to be satisfied 122-135(1)
The partners must own all the *shares in the company just after the time of the trigger event.
122-135(2)
Each partner must own the *shares the partner received for the trigger event happening in the same capacity that the partner:
(a) owned the partner ' s interests in the assets that the company now owns; or
(b) participated in the creation of the asset in the company.
122-135(3)
This Subdivision does not apply to the *disposal or creation of any of the assets specified in this table:
122-135(4)
If:
(a) the *CGT asset or any of the assets of the *business is a right, option, *convertible interest or *exchangeable interest; and
(b) the company *acquires another CGT asset by exercising the right or option or by converting the convertible interest or in exchange for the disposal or redemption of the exchangeable interest;
122-135(5)
The *ordinary income and *statutory income of the company must not be exempt from income tax because it is an *exempt entity for the income year of the trigger event.
122-135(6)
For a partner who is not a trustee of a trust at the time of the trigger event, either:
(a) the partner and the company must both be Australian residents at that time; or
(b) both of the following requirements must be satisfied:
122-135(7)
For a partner who is a trustee of a trust at the time of the trigger event, either:
(a) at that time, the trust must be a *resident trust for CGT purposes and the company must be an Australian resident; or
(b) both of the following requirements must be satisfied:
View history note
Hide history noteSECTION 122-135 Other requirements to be satisfied 122-135(1)
The partners must own all the *shares in the company just after the time of the trigger event.
122-135(2)
Each partner must own the *shares the partner received for the trigger event happening in the same capacity that the partner:
(a) owned the partner ' s interests in the assets that the company now owns; or
(b) participated in the creation of the asset in the company.
Note:
If a partner ' s interests were owned as trustee, the partner must receive shares as trustee.
122-135(3)
This Subdivision does not apply to the *disposal or creation of any of the assets specified in this table:
| Assets to which Subdivision does not apply | |||
| Item | In this situation: | This Subdivision does not apply to: | |
| 1 | The partners *dispose of their interests in a *CGT asset to, or create a CGT asset in, the company | (a) | a *collectable or a *personal use asset; or |
| (b) | a decoration awarded for valour or brave conduct (except if a partner paid money or gave any other property for it); or | ||
| (c) | a *precluded asset; or | ||
| (d) | an asset that becomes *trading stock of the company just after the *disposal or creation | ||
| . | |||
| 2 | The partners *dispose of their interests in all the assets of a business | (a) | a *collectable or a *personal use asset; or |
| (b) | a decoration awarded for valour or brave conduct (except if a partner paid money or gave any other property for it); or | ||
| (c) | an asset that becomes *trading stock of the company just after the disposal or creation (unless it was trading stock of the partnership when it was disposed of) |
122-135(4)
If:
(a) the *CGT asset or any of the assets of the *business is a right, option, *convertible interest or *exchangeable interest; and
(b) the company *acquires another CGT asset by exercising the right or option or by converting the convertible interest or in exchange for the disposal or redemption of the exchangeable interest;
the other asset cannot become *trading stock of the company just after the company acquired it.
122-135(5)
The *ordinary income and *statutory income of the company must not be exempt from income tax because it is an *exempt entity for the income year of the trigger event.
122-135(6)
For a partner who is not a trustee of a trust at the time of the trigger event, either:
(a) the partner and the company must both be Australian residents at that time; or
(b) both of the following requirements must be satisfied:
(i) each asset must be *taxable Australian property at that time; and
(ii) the shares in the company mentioned in subsection 122-130(1) must be taxable Australian property just after that time.
122-135(7)
For a partner who is a trustee of a trust at the time of the trigger event, either:
(a) at that time, the trust must be a *resident trust for CGT purposes and the company must be an Australian resident; or
(b) both of the following requirements must be satisfied:
(i) each *CGT asset must be a CGT asset of the trust that is *taxable Australian property at that time; and
(ii) the shares in the company mentioned in subsection 122-130(1) must be taxable Australian property just after that time.
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