Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 124 - Replacement-asset roll-overs  

Subdivision 124-N - Disposal of assets by a trust to a company  

Operative provisions

SECTION 124-875   Effect on the transferor and transferee  

Capital gains and losses disregarded

124-875(1)    
Any *capital gain or *capital loss from *CGT event A1 happening to the transferor under the trust restructure is disregarded (even if *CGT event J4 applies).

Note:

The effect of the roll-over may be reversed if the transferor does not cease to exist within 6 months: see section 104-195 .

Cost base is transferred

124-875(2)    
The first element of the *cost base and *reduced cost base (for the transferee) of each *CGT asset that the transferee *acquires under the trust restructure is the same as the cost base and reduced cost base of that asset (for the transferor) just before that acquisition.

Note:

For the cost base and reduced cost base of interests in the transferee: see Subdivision 124-A .

Pre-CGT assets retain their status

124-875(3)    
If the transferor *acquired any of the *CGT assets *disposed of to the transferee under the trust restructure before 20 September 1985, the transferee is taken to have acquired it before that day.

124-875(4)    
However, subsection (3) is taken never to have applied to such an asset of the transferee if subsection 104-195(4) (CGT event J4) applies to the transferee in relation to the asset.

Exception: trading stock

124-875(5)    
This section does not apply to a *CGT asset if:

(a) the asset was an item of *trading stock of the transferor and becomes an item of trading stock of the transferee; or

(b) the asset was not an item of trading stock of the transferor but becomes an item of trading stock of the transferee when the transferee *acquires it.

Exception: asset must be taxable Australian property for foreign resident transferee

124-875(6)    

For a transferee that is a foreign resident, this section only applies to a *CGT asset that is *taxable Australian property just after the transferee *acquires it under the trust restructure.