Income Tax Assessment Act 1997

Part 3-3 inserted by No 46 of 1998.

Div 152 inserted by No 165 of 1999 (as amended by No 173 of 2000).

S 152-420 substituted by No 55 of 2007 , s 3 and Sch 1 item 57, applicable to CGT events happening in the 2006-07 income year or later income years. S 152-420 formerly read:

SECTION 152-420 Replacement asset conditions  
152-420(1)
For an asset to be eligible to be a replacement asset, you must *acquire it during the period starting one year before, and ending 2 years after, the happening of the last *CGT event in the income year for which you obtain the small business roll-over.

Extension of time if all reasonable steps taken

152-420(2)
This time limit does not apply to the extent that your *capital proceeds for the *CGT event are increased under subsection 116-45(2) after that time is up. Instead, you have until 12 months after you receive those additional proceeds to *acquire a replacement asset the first and second elements of the *cost base of which are at least equal to the value of those additional proceeds.

Note 1:

If you do not acquire a replacement asset with a sufficiently large cost base within the new time limit, your roll-over will be reduced accordingly under section 152-415 .

Note 2:

Section 116-45 applies if you do not receive your capital proceeds despite having taken all reasonable steps to get them.

152-420(3)
The Commissioner may extend the time limits under subsections (1) and (2).

Type of replacement asset allowed

152-420(4)
A replacement asset must be an *active asset when it is *acquired or an active asset by the end of 2 years after the last *CGT event during the year for which you choose a small business roll-over.

Note:

If a replacement asset is an active asset and its status subsequently changes, you may make a capital gain: see section 104-185 (CGT event J2). Special rules apply if you die: see section 152-425 .

152-420(5)
If a replacement asset is a *share in a company or an interest in a trust, you, or an entity *connected with you, must be a *controlling individual of the company or trust just after you *acquire the share or interest.

Example:

Joseph owns 50% of the shares in Company A and Company B. He is therefore a controlling individual of the companies (see section 152-55 ). The companies are connected with Joseph (see section 152-30 ) because he controls both of them.

Company A owns land which it leases to Joseph for use in a business. It sells the land at a profit and buys shares in Company B.

The replacement asset test is satisfied because Joseph is connected with Company A and is a controlling individual of Company B.

Note:

If a replacement asset is a share in a company and the status of the company changes, or you or an entity connected with you ceases to be its controlling individual, you may make a capital gain: see section 104-190 (CGT event J3). Special rules apply if you die: see section 152-425 .

S 152-420 inserted by No 165 of 1999 (as amended by No 173 of 2000).