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-B - Asset compulsorily acquired, lost or destroyed  

When a roll-over is available

SECTION 124-70   Events giving rise to a roll-over  

124-70(1)    
You may be able to choose a roll-over if one of these events happens to a *CGT asset (the original asset ) you own:

(a) it is compulsorily *acquired by an *Australian government agency;

(aa) it is compulsorily acquired by an entity (other than an Australian government agency or a *foreign government agency) under a power of compulsory acquisition conferred by a law covered under subsection (1A);

(b) it, or part of it, is lost or destroyed;

(c) you *dispose of it to an entity (other than a foreign government agency) in circumstances meeting all of these conditions:

(i) the disposal takes place after a notice was served on you by or on behalf of the entity;

(ii) the notice invited you to negotiate with the entity with a view to the entity acquiring the asset by agreement;

(iii) the notice informed you that if the negotiations were unsuccessful, the asset would be compulsorily acquired by the entity;

(iv) the compulsory acquisition would have been under a power of compulsory acquisition conferred by a law covered under subsection (1A);

(ca) you dispose of it to an entity (other than a foreign government agency) in circumstances meeting all of these conditions:

(i) the asset is land over which a mining lease was compulsorily granted;

(ii) the lease significantly affected your use of the land;

(iii) the lease was in force just before the disposal;

(iv) the entity to which you dispose of the land was the lessee under the lease;

(cb) you dispose of it to an entity (other than a foreign government agency) in circumstances meeting all of these conditions:

(i) the asset is land over which a mining lease would have been compulsorily granted if you had not disposed of it;

(ii) that lease would have significantly affected your use of the land;

(iii) the entity to which you dispose of the land would have been the lessee under the lease.

(d) if it is a lease granted to you by an *Australian government agency under an *Australian law - the lease expires and is not renewed.

Note 1:

There are no roll-over consequences if you make a capital loss from the event.

Note 2:

Section 103-25 tells you when you have to make the choice.

124-70(1A)    

A law is covered under this subsection if it is:

(a) an *Australian law (other than Chapter 6A of the Corporations Act 2001 ); or

(b) a *foreign law (other than a foreign law corresponding to Chapter 6A of the Corporations Act 2001 ).

124-70(2)    

You must receive money or another *CGT asset (except a *car, motor cycle or similar vehicle), or both:

(a) as compensation for the event happening; or

(b) under an insurance policy against the risk of loss or destruction of the original asset.

Note:

There are other requirements that must be satisfied if:

• you receive money: see section 124-75 ; or

• you receive another CGT asset: see section 124-80 .

124-70(3)    
The requirement in subsection (4) must be satisfied if:

(a) you are a foreign resident just before the event happens; or

(b) you are the trustee of a trust that is a *foreign trust for CGT purposes for the income year in which the event happens.

124-70(4)    

The original asset must be *taxable Australian property just before the event happens. The other asset must be taxable Australian property just after you *acquire it.