Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 122 - Roll-over for the disposal of assets to, or the creation of assets in, a wholly-owned company  

Subdivision 122-A - Disposal or creation of assets by an individual or trustee to a wholly-owned company  

Replacement-asset roll-over if you dispose of all the assets of a business

SECTION 122-55   All assets acquired before 20 September 1985  

122-55(1)    
You are taken to have *acquired all of the *shares before 20 September 1985 if you acquired all the assets of the *business before that day and none of the assets is a *precluded asset.

122-55(2)    

However, if at least one of the assets is a *precluded asset, you are taken to have *acquired a whole number of the *shares (but not all of them) before that day. The number is the greatest possible that (when expressed as a percentage of all the shares) does not exceed:

• the total of the *market values of the assets that are not *precluded assets, less any liabilities the company undertakes to discharge in respect of those assets;

expressed as a percentage of:

• the total of the market values of all the assets, less any liabilities the company undertakes to discharge in respect of those assets.

Note:

There are rules for working out what are the liabilities in respect of an asset: see section 122-37 .

122-55(3)    

The first element of each other *share's *cost base and *reduced cost base is the total of the *market values of the *precluded assets (less any liabilities the company undertakes to discharge in respect of those assets) divided by the number of those other shares.

122-55(4)    

The *market value of an asset is worked out when you *disposed of it. The *cost base or *reduced cost base of an asset is worked out at the same time.