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INCOME TAX ASSESSMENT ACT 1997 - SECT 124.870 Roll - over for owner of units or interests in a trust

INCOME TAX ASSESSMENT ACT 1997 - SECT 124.870

Roll - over for owner of units or interests in a trust

  (1)   You can choose to obtain a roll - over (whether or not the transferor and transferee choose to obtain a roll - over, and even if * CGT event J4 applies) if:

  (a)   you own units or interests in the transferor (your original interests ); and

  (b)   the ownership of all your units or interests ends under a trust restructure in exchange for * shares in the transferee (your replacement interests ).

Note 1:   The roll - over consequences are set out in Subdivision   124 - A. The original assets are your units and interests in the transferor. The new assets are your shares in the transferee.

Note 2:   The effect of the roll - over may be reversed if the transferor does not cease to exist within 6 months: see section   104 - 195.

  (2)   You must make the choice for each of your original interests.

  (3)   An entity that is a foreign resident cannot choose a roll - over under this section unless the replacement interests the entity * acquires in the transferee are * taxable Australian property just after their acquisition.

  (4)   If you choose a roll - over, you cannot make a * capital loss from a * CGT event that happens to your original interests during the * trust restructuring period.

Note:   The rule in subsection   (4) prevents a capital loss arising on your units or interests after the trust assets have been disposed of to the company but before your shares are issued to you.

Exception: trading stock

  (5)   This section does not apply to your ownership of an original interest ending if:

  (a)   the interest was an item of your * trading stock and the corresponding replacement interest becomes an item of your trading stock when you * acquire it; or

  (b)   the interest was not an item of your trading stock but the corresponding replacement interest becomes an item of your trading stock when you acquire it.

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