Tax Laws Amendment (2006 Measures No. 7) Act 2007 (55 of 2007)

Schedule 1   Small business relief for CGT events

Income Tax Assessment Act 1997

57   Sections 152-405, 152-410, 152-415, 152-420 and 152-425

Repeal the sections, substitute:

Operative provisions

152-410 When you can obtain the roll-over

You can choose to obtain a roll-over under this Subdivision for a *capital gain if the basic conditions in Subdivision 152-A are satisfied for the gain.

Note 1: You can choose the roll-over even if you have not yet acquired a replacement asset or incurred fourth element expenditure, but:

(a) CGT event J5 happens if, by the end of the replacement asset period, you do not acquire the asset or incur the expenditure (see section 104-197); and

(b) CGT event J6 happens if, by the end of the replacement asset period, the cost of the replacement asset or the amount of fourth element expenditure incurred (or both) is less than the amount of the capital gain that you disregarded (see section 104-198).

Note 2: If you have acquired a replacement asset or incurred fourth element expenditure but there is a change in relation to the replacement asset or improved asset after the end of the replacement asset period, CGT event J2 may happen: see section 104-185.

152-415 What the roll-over consists of

If you choose the roll-over, you can choose to disregard all or part of each *capital gain to which this Subdivision applies.

Note: If you choose to disregard only some of the capital gain, you make a capital gain equal to the remaining amount.

Example: The original capital gain was $100,000. You have reduced it to $25,000 under other concessions (apart from the roll-over). If you choose to disregard $20,000, you are left with a final capital gain of $5,000.

152-420 Rules where an individual who has obtained a roll-over dies

(1) This section applies if:

(a) a replacement asset, or an asset in relation to which *fourth element expenditure has been incurred, formed part of the estate of an individual who has died; and

(b) either or both of the following apply:

(i) the asset has devolved to the deceased’s *legal personal representative;

(ii) the asset has *passed to a beneficiary of the deceased; and

(c) a change covered by subsection 104-185(2) or (3) did not happen while the deceased owned it or, if the asset has passed to a beneficiary, while the asset was in the hands of the deceased’s legal personal representative.

(2) For the purposes of this Subdivision, anything done or not done by the deceased in relation to the asset is treated as though it had been done or not done by the *legal personal representative.

(3) For the purposes of this Subdivision, if the asset has *passed to a beneficiary, anything done or not done by the deceased or by the deceased’s *legal personal representative (including because of the operation of subsection (2)) in relation to the asset is treated as though it had been done or not done by the beneficiary.