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-G - Transfer of assets between certain trusts  

Operative provisions

SECTION 126-240   Consequences for the trusts  

Disregard any capital gain or loss

126-240(1)    
If the roll-over is chosen, disregard any *capital gain or *capital loss the trustee of the transferring trust makes from:

(a) creating the receiving trust over the roll-over asset; or

(b) transferring the roll-over asset to the receiving trust;

at the transfer time.

Adjust roll-over asset's cost base and reduced cost base

126-240(2)    
If the roll-over is chosen:

(a) the first element of the roll-over asset's *cost base, in the hands of the receiving trust, is its cost base just before the transfer time; and

(b) the first element of the roll-over asset's *reduced cost base is worked out similarly.

Any pre-transfer losses of receiving trust cannot be utilised

126-240(3)    
If the roll-over is chosen:

(a) any *net capital loss of the receiving trust for an income year ending before the transfer time cannot be applied after the transfer time to reduce an amount of that trust's *capital gains; and

(b) the sum of the receiving trust's *capital losses for the income year that includes the transfer time (the transfer year ) is reduced by an amount equal to any net capital loss that the trust would have had for that year had that year ended just before the transfer time; and

(c) any *tax loss of the receiving trust for an income year ending before the transfer time cannot be deducted after the transfer time from an amount of that trust's assessable income or *net exempt income; and

(d) the sum of the receiving trust's deductions for the transfer year is reduced by an amount equal to any tax loss that the trust would have had for that year had that year ended just before the transfer time.

References in this subsection to the transfer time are to be read as references to the start time if subsection 126-225(2) applies.

Note:

Subsection 126-225(2) applies if the roll-over asset is transferred to the receiving trust after an earlier roll-over under this Subdivision, for another asset, was obtained for the trusts.

Pre-CGT assets

126-240(4)    
If:

(a) the roll-over is chosen; and

(b) the transferring trust last *acquired the roll-over asset before 20 September 1985;

the receiving trust is taken to have acquired it before that day.