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-M - Scrip for scrip roll-over  

Operative provisions

SECTION 124-790   Partial roll-over  

124-790(1)    

The original interest holder can obtain only a partial roll-over if its *capital proceeds for its original interest include something (the ineligible proceeds ) other than its replacement interest. There is no roll-over for that part (the ineligible part ) of its original interest for which it received ineligible proceeds.

124-790(2)    
The *cost base of the ineligible part is that part of the cost base of your original interest as is reasonably attributable to it.

Example:

Ken owns 100 shares in Aim Ltd. Those shares have a cost base of $2.

Ken accepts an offer from LBZ Ltd to acquire those shares. The offer is 1 share in LBZ (market value $4) plus $1 for each Aim share.

Ken chooses the roll-over to the extent that he can.

The cost base of the ineligible part is [ $100 × $200 ] ÷ $500 = $40.

Ken makes a capital gain of $100 − $40 = $60.

124-790(3)    
(Repealed by No 89 of 2000)