Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 122 - Roll-over for the disposal of assets to, or the creation of assets in, a wholly-owned company  

Subdivision 122-B - Disposal or creation of assets by partners to a wholly-owned company  

Replacement-asset roll-over if the partners dispose of all the assets of a business

SECTION 122-190   Interests acquired before and after 20 September 1985  

122-190(1)    

If a partner *acquired some of the interests in the assets on or after 20 September 1985, the partner is taken to have acquired a whole number of the *shares (but not all of them) before that day. The number is the greatest possible that (when expressed as a percentage of all the shares) does not exceed:

• the total of the *market values of the partner's interests in the assets (except any *precluded assets) that the partner acquired before that day, less any liabilities the company undertakes to discharge in respect of those interests;

expressed as a percentage of:

• the total of the market values of all the partner's interests in the assets, less any liabilities the company undertakes to discharge in respect of those interests.

122-190(2)    

The first element of the partner's *cost base of each other *share is the sum of the *market values of the partner's interests in the *precluded assets and the cost bases of the partner's interests in the other assets that the partner *acquired on or after that day (less any liabilities the company undertakes to discharge in respect of all of those interests) divided by the number of the other shares.

Note:

There are special indexation rules for roll-overs: see Division 114 .

122-190(3)    
The first element of the partner's *reduced cost base of each other *share is worked out similarly.

122-190(4)    

The *market value of an interest in an asset is worked out when the partner *disposed of it. The *cost base or *reduced cost base of an interest in an asset is worked out at the same time.