Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

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

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Division 126 - Same-asset roll-overs

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Subdivision 126-G - Transfer of assets between certain trusts

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History

Subdiv 126-G inserted by No 19 of 2010, s 3 and Sch 1 item 9, applicable to CGT events happening on or after 1 November 2008. No 19 of 2010, s 3 and Sch 1 items 12 and 13 also contains the following transitional provisions:

Transitional: time for making mirror choices
(1)
Subsection 126-235(3) of the Income Tax Assessment Act 1997 does not apply if the other trust makes a mirror choice under a provision of a taxation law by:

(a) 6 months after the day this Act receives the Royal Assent [ CCH Note: assent was gained 24 March 2010]; or

(b) a later day allowed by the Commissioner of Taxation.
Note:

For this item to have effect, the other trust must still be able, under that provision of the taxation law, to make the mirror choice.

(2)
This item has effect in addition to subsection 126-235(4) of the Income Tax Assessment Act 1997 .
Transitional: deadline for giving information to beneficiaries
(1)
This item applies in relation to a roll-over chosen under Subdivision 126-G of the Income Tax Assessment Act 1997 if the transfer year for the roll-over is the transferring trust's 2008-09 income year.

(2)
Subsection 126-260(1) of that Act has effect, in relation to the roll-over, as if the reference in that subsection to 3 months after the end of the transfer year were a reference to 6 months after the day this Act receives the Royal Assent [ CCH Note: assent was gained 24 March 2010].

Operative provisions

SECTION 126-265 Interest sale facilities

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Interest sale facilities

126-265(1)
For the purposes of this Subdivision, an entity (the investor ) is treated as owning a *membership interest (the roll-over interest ) in the receiving trust at a time (the deeming time ), if:

(a) the investor owned a membership interest in the transferring trust; and

(b) a trust is created, or a transfer happens, (the transaction ) as mentioned in paragraph 126-225(1)(a) in relation to *CGT assets of the transferring trust; and

(c) because:

(i) a *foreign law impedes the ability of the receiving trust to issue or transfer the roll-over interest to the investor; or

(ii) it would be impractical or unreasonably onerous to determine whether a foreign law impedes the ability of the receiving trust to issue or transfer the roll-over interest to the investor;

it is *arranged that the receiving trust will issue or transfer the roll-over interest to another entity (the facility ) under the transaction instead of to the investor; and

(d) in accordance with that arrangement and as a result of the transaction, the facility:

(i) becomes the owner of the roll-over interest; and

(ii) owns the roll-over interest at the deeming time; and

(e) under the arrangement, the investor is entitled to receive from the facility:

(i) an amount equivalent to the *capital proceeds of any *CGT event that happens in relation to the roll-over interest (less expenses); or

(ii) if a CGT event happens in relation to the roll-over interest together with CGT events happening in relation to other membership interests - an amount equivalent to the investor ' s proportion of the total capital proceeds of the CGT events (less expenses).

126-265(2)
The facility is treated as not owning the roll-over interest at the deeming time.

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