INCOME TAX ASSESSMENT ACT 1997 - SECT 122.200 Consequences for the company (disposal case)

INCOME TAX ASSESSMENT ACT 1997 - SECT 122.200

  (1)   There are these consequences for the company in a disposal case if the partners choose to obtain a roll - over. They are relevant for interests in each * CGT asset (except a * precluded asset) that the partners * disposed of to the company.

Note 1:   A capital gain or loss from a precluded asset can be disregarded: see Subdivision   118 - A.

Note 2:   The reduced cost base (as determined under this section) may be modified for a roll - over happening after a demerger: see section   125 - 170.

Interests acquired on or after 20   September 1985

  (2)   If all of the partners' interests in an asset were * acquired on or after 20   September 1985:

  (a)   the first element of the asset's * cost base (in the hands of the company) is the sum of the cost bases of the partners' interests in the asset when it was disposed of; and

  (b)   the first element of the asset's * reduced cost base (in the hands of the company) is the sum of the reduced cost bases of the partners' interests in the asset when it was disposed of.

Note:   There are special indexation rules for roll - overs: see Division   114.

Interests acquired before 20   September 1985

  (3)   If all of the partners' interests in an asset were * acquired before 20   September 1985, the company is taken to have acquired it before that day.

Note:   A capital gain or loss from a CGT asset acquired before 20   September 1985 is generally disregarded: see Division   104. This exemption is removed in some situations: see Division   149.

Interests acquired on or after and before 20   September 1985

  (4)   If some of the partners' interests in an asset (the original asset ) were * acquired on or after 20   September 1985 and some before that day, the company is taken to have acquired 2 separate * CGT assets:

  (a)   one (which the company is taken to have acquired on or after 20   September 1985) representing the extent to which the partners' interests in the original asset were acquired by the partners on or after that day; and

  (b)   another (which the company is taken to have acquired before that day) representing the extent to which the partners' interests in the original asset were acquired by the partners before that day.

  (5)   The first element of the * cost base of the separate asset that the company is taken to have * acquired on or after 20   September 1985 is the sum of the cost bases of the partners' interests in the original asset that they acquired on or after that day.

Note:   There are special indexation rules for roll - overs: see Division   114.

  (6)   The first element of its * reduced cost base is worked out similarly.