Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 126 - Same-asset roll-overs  

Subdivision 126-D - Small superannuation funds  

SECTION 126-140   CGT event involving small superannuation funds  

Payment splits under Family Law Act

126-140(1)    
There is a roll-over if:

(a)    an interest in a *small superannuation fund is subject to a *payment split; and

(b)    

the *non-member spouse in relation to that interest serves a waiver notice under section 90XZA or 90YZQ of the Family Law Act 1975 in respect of that interest; and

(c)    

as a result of serving the notice, the trustee (the transferor ) of the fund transfers a *CGT asset to the trustee (the transferee ) of another *complying superannuation fund for the benefit of the non-member spouse.

Note:

CGT event E2 may apply to the transfer.

Payment splits under the Superannuation Industry (Supervision) Regulations

126-140(2)    
There is also a roll-over if:

(a)    an interest in a *small superannuation fund (the first fund ) is subject to a *payment split; and

(b)    

as a result of the payment split, there is a transfer or roll over of benefits, for the benefit of the *non-member spouse, from the first fund to another *complying superannuation fund; and

(c)    the transfer is under provisions of the Superannuation Industry (Supervision) Regulations 1994 dealing with superannuation interests that are subject to payment splits; and

(d)    in order to give effect to the payment split, the trustee (the transferor ) of the first fund transfers a *CGT asset to the trustee (the transferee ) of the other fund for the benefit of the non-member spouse.

Note:

CGT event E2 may apply to the transfer.

Transfer of own interest in a small superannuation fund

126-140(2A)    

There is also a roll-over if:

(a)    an individual has an interest in a *small superannuation fund (the first fund ); and

(b)    the individual ' s *spouse, or former spouse, also has an interest in the first fund; and

(c)    the trustee (the transferor ) of the first fund transfers a *CGT asset to the trustee (the transferee ) of another *complying superannuation fund for the benefit of the individual; and

(d)    the transfer is in accordance with an award, order or agreement mentioned in subsection (2B) ; and

(e)    if the transfer is part of a series of transfers in accordance with the award, order or agreement - the individual will no longer have an interest in the first fund when the series of transfers is complete; and

(f)    if the transfer is not part of a series of transfers in accordance with the award, order or agreement - as a result of the transfer, the individual no longer has an interest in the first fund; and

(g)    there has not been a roll-over under subsection (1) or (2) or this subsection in relation to the transfer of another CGT asset from the first fund, where the transfer was:

(i) made because of the award, order or agreement; and

(ii) for the benefit of that spouse, or former spouse; and

(h)    

if the transfer is in accordance with an agreement mentioned in paragraph (2B)(d) , (da) or (e) , the conditions in subsection (2C) are satisfied.

Note:

CGT event E2 may apply to the transfer.

126-140(2B)    

The awards, orders and agreements are:

(a)    an award made in an arbitration referred to in section 13H of the Family Law Act 1975 or a corresponding award made in an arbitration under a corresponding *State law, *Territory law or *foreign law; or

(b)    

a court order made under section 79 , subsection 90AE(2) or 90AF(2) or section 90SM or 90YX of the Family Law Act 1975 ; or

(c)    

a court order made under a State law, Territory law or foreign law relating to breakdowns of relationships between *spouses that corresponds to an order made under subsection 90AE(2) or 90AF(2) or section 90SM of the Family Law Act 1975 ; or

(d)    a financial agreement made under Part VIIIA of the Family Law Act 1975 that is binding because of section 90G of that Act or a corresponding written agreement that is binding because of a corresponding foreign law; or

(da)    

a Part VIIIAB financial agreement (within the meaning of the Family Law Act 1975 ) that is binding because of section 90UJ of that Act; or

(e)    

a written agreement:

(i) that is binding under a State law, Territory law or foreign law relating to breakdowns of relationships between spouses; and

(ii) that, because of such a law, prevents a court making an order about matters to which the agreement applies, or that is inconsistent with the terms of the agreement in relation to those matters, unless the agreement is varied or set aside.

126-140(2C)    

The conditions are that:

(a)    at the time of the transfer:

(i) the *spouses, or former spouses, involved are separated; and

(ii) there is no reasonable likelihood of cohabitation being resumed; and

(b)    

the transfer happened because of reasons directly connected with the breakdown of the relationship between the spouses or former spouses.

126-140(2D)    

For the purposes of subsection (2C) , the question whether *spouses, or former spouses, have separated is to be determined in the same way as it is for the purposes of section 48 of the Family Law Act 1975 (as affected by sections 49 and 50 of that Act).

Roll-over consequences

126-140(3)    
A *capital gain or *capital loss the transferor makes from the transfer of the asset is disregarded.

126-140(4)    
If the transferor *acquired the asset on or after 20 September 1985:

(a)    the first element of the asset ' s *cost base (in the hands of the transferee) is the asset ' s cost base (in the hands of the transferor) at the time the transferee acquired it; and

(b)    the first element of the asset ' s *reduced cost base (in the hands of the transferee) is worked out similarly.

126-140(5)    
If the transferor *acquired the asset before 20 September 1985, the transferee is taken to have acquired it before that day.

Note:

A capital gain or loss you make from a CGT asset you acquired before 20 September 1985 is generally disregarded: see Division 104 . This exemption is removed in some situations: see Division 149 .