INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17A - Roll-over relief for certain disposals of assets related to small businesses  

Subdivision B - How roll-over relief is available on the disposal of an asset  

SECTION 160ZZPU   APPLICATION OF NET GOODWILL ROLL-OVER AMOUNT IF THE ONLY REPLACEMENT ASSETS ARE GOODWILL  

160ZZPU(1)   Application of section.  

This section applies to a taxpayer in relation to a disposal year of income if the taxpayer nominates only a replacement goodwill asset or replacement goodwill assets for the purposes of the application of this Division in respect of the net roll-over amount or the net roll-over amounts applying to the taxpayer in respect of that year of income.

Note:

Replacement goodwill assets can only be nominated in respect of a net goodwill roll-over amount (see subsection 160ZZPT(3) ).

160ZZPU(2)   If total goodwill cost base is not less than net goodwill roll-over amount.  

If the total goodwill cost base in relation to the taxpayer in respect of the disposal year of income is equal to or greater than the net goodwill roll-over amount applying to the taxpayer in respect of that year of income:

(a) the taxpayer must apportion the whole of the net goodwill roll-over amount among the nominated replacement assets in such manner as the taxpayer determines but so that the amount apportioned to a particular asset does not exceed the sum of:

(i) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset; and

(ii) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset; and

(b) if an amount is apportioned to an asset - the amount is to be applied, at the time of the acquisition of the asset by the taxpayer, in reduction of the following amounts in such proportions as the taxpayer determines:

(i) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset;

(ii) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset.

160ZZPU(3)   If total goodwill cost base is less than net goodwill roll-over amount.  

If the total goodwill cost base in relation to the taxpayer in respect of the disposal year of income is less than the net goodwill roll-over amount applying to the taxpayer in respect of that year of income, the following provisions have effect:

(a) the taxpayer must apportion so much of the net goodwill roll-over amount as is equal to the total goodwill cost base among the nominated replacement assets so that the amount apportioned to a particular asset does not exceed the sum of:

(i) the amount that, at the time of the acquisition of the asset, was the consideration in respect of the acquisition of the asset; and

(ii) the amount that, at that time, was the total of the incidental costs to the taxpayer of the acquisition of the asset;

(b) if an amount is apportioned to an asset - the consideration in respect of the acquisition of the asset and the incidental costs to the taxpayer of the acquisition of the asset are each taken, at the time of the acquisition of the asset by the taxpayer, to be nil;

(c) an amount equal to the difference between the total goodwill cost base and the net goodwill roll-over amount is taken to be a capital gain that accrued to the taxpayer during the disposal year of income.