INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17 - Miscellaneous roll-over relief  

SECTION 160ZZL   ASSET RECEIVED AS A RESULT OF INVOLUNTARY DISPOSAL  

160ZZL(1)   [Application of section]  

Where -

(a) a taxpayer would, but for this section, be taken to have disposed of, or to have disposed of part of, an asset (in this section referred to as the ``original asset'' ) by reason of an act, transaction or event as a result of which the taxpayer has received an asset (in this section referred to as the ``replacement asset'' ) -

(i) by way of compensation for the compulsory acquisition, or for loss or destruction, of the original asset; or

(ii) under a policy of insurance against the risk of loss or destruction of the original asset;

(aa) the replacement asset is not trading stock of the taxpayer immediately after its acquisition by the taxpayer;

(b) if, immediately before the act, transaction or event took place, the original asset was owned by -

(i) a person (not being a person in the capacity of a trustee) who was not a resident of Australia; or

(ii) a person in the capacity of a trustee of a trust estate that was not a resident trust estate or in the capacity of a trustee of a unit trust that was not a resident unit trust,

the replacement asset is a taxable Australian asset;

(c) if the original asset was acquired by the taxpayer on or after 20 September 1985, the market value of the replacement asset at the time when it was acquired by the taxpayer exceeded the amount that would have been the indexed cost base to the taxpayer of the original asset; and

(d) the taxpayer has, by notice in writing given to the Commissioner on or before the date of lodgment of the return of income of the taxpayer for the year of income in which the disposal took place, or within such further period as the Commissioner allows, elected that this section is to apply in respect of the disposal,

the following provisions of this section have effect.

160ZZL(2)   [Section paramount]  

The application of the provisions of this Part, other than this section, in respect of the disposal is subject to this section.

160ZZL(3)   [Original asset acquired prior to 20 September 1985]  

If the original asset was acquired before 20 September 1985, the replacement asset shall be deemed, for the purposes of this Part, to have been acquired before that date.

160ZZL(4)   [No disposal of original asset; acquisition of replacement asset]  

The taxpayer shall not be taken for the purposes of this Part to have disposed of the original asset but shall be deemed to have paid as consideration in respect of the acquisition of the replacement asset an amount equal to the indexed cost base to the taxpayer of the original asset.

160ZZL(5)    

160ZZL(6)   [Disposal of replacement asset within 12 months]  

If the replacement asset is disposed of by the taxpayer within 12 months after the original asset was acquired by the taxpayer, the references in paragraph (1)(c) and subsection (4) to the indexed cost base to the taxpayer of the original asset shall be construed as references to the cost base to the taxpayer of the original asset.

160ZZL(7)   [Compensation for non-renewal of a renewable Crown lease]  

For the purposes of this section, where:

(a) an Australian Crown lease owned by a taxpayer expires;

(b) the Crown lease is capable of being renewed; and

(c) the Crown lease is not renewed;

any asset received by the taxpayer by way of compensation for the non-renewal of the Crown lease shall be treated as if it were received by the taxpayer by way of compensation for the compulsory acquisition of the Crown lease.

160ZZL(8)   [Negotiated acquisition of asset by government authority under threat of compulsory acquisition]  

For the purposes of this section, where:

(a) a notice is served on a taxpayer by or on behalf of an Australian government or Australian government authority:

(i) inviting the taxpayer to negotiate with the government or authority with a view to the acquisition, by agreement, by the government or authority, of an asset (in this subsection called the ``first asset'' ); and

(ii) informing the taxpayer that, if those negotiations are unsuccessful, the first asset will be compulsorily acquired by the government or authority; and

(b) as a result of those negotiations, the first asset is acquired by the government or authority;

any other asset received by the taxpayer in respect of the disposal of the first asset to the government or authority shall be treated as if it were received by the taxpayer by way of compensation for the compulsory acquisition of the first asset.

160ZZL(9)   [Reference to compulsory acquisition]  

A reference in this section to the compulsory acquisition of an asset is a reference to the compulsory acquisition of the asset by an Australian government or an Australian government authority.

160ZZL(10)   [Definitions]  

In this section:

"Australian Crown lease"
means a lease of the kind referred to in paragraph (a) of the definition of ``Crown lease'' in subsection 160K(1) ;

"Australian government"
means the Commonwealth, a State or a Territory;

"Australian government authority"
means an authority of the Commonwealth, of a State or of a Territory.