Private ruling: Roll-over under former section 160ZZO
Date of advice: 27 April 2026
Published: 13 July 2026
Ruling period: Income year ended 30 June 20XX
Date scheme commenced: 1 July XXXX

Ruling: Q1: Did Company A and Company B meet the conditions to access the roll-over in former section 160ZZO of the Income Tax Assessment Act 1936 (ITAA 1936) when Company A transferred an asset to Company B during the 199X income year? | A1: Yes.


Relevant legislative provisions: Income Tax Assessment Act 1936 former Part IIIA | Income Tax Assessment Act 1936 former section 160G | Income Tax Assessment Act 1936 former subsection 160G(2) | Income Tax Assessment Act 1936 former subsection 160G(3) | Income Tax Assessment Act 1936 former subsection 160G(4) | Income Tax Assessment Act 1936 former subsection 160K(1) | Income Tax Assessment Act 1936 former section 160ZZO | Income Tax Assessment Act 1936 former subsection 160ZZO(1) | Income Tax Assessment Act 1936 former paragraph 160ZZO(1)(a) | Income Tax Assessment Act 1936 former paragraph 160ZZO(1)(b) | Income Tax Assessment Act 1936 former paragraph 160ZZO(1)(c) | Income Tax Assessment Act 1936 former paragraph 160ZZO(1)(d) | Income Tax Assessment Act 1936 former paragraph 160ZZO(1)(e) Anti-avoidance rules | Part IVA of the Income Tax Assessment Act 1936 contains anti-avoidance rules that can apply in certain circumstances where you or another taxpayer obtains a tax benefit, imputation benefit or diverted profits tax benefit in connection with an arrangement. | If Part IVA applies, the tax benefit or imputation benefit can be cancelled (for example, by disallowing a deduction that was otherwise allowable) or you or another taxpayer could be liable to the diverted profits tax. | We have not fully considered the application of Part IVA to the arrangement you asked us to rule on, or to an associated or wider arrangement of which that arrangement is part. | If you want us to rule on whether Part IVA applies, we will need to obtain and consider all the facts about the arrangement which are relevant to determining whether Part IVA may apply. | For more information on Part IVA, go to our website ato.gov.au/gaar .

Reasons for decision: Summary: Company A and Company B met the conditions to access the roll-over in former section 160ZZO of the ITAA 1936 when Company A transferred an asset to Company B during the 199X income year. | Detailed Reasoning - Detailed Reasoning: Former section 160ZZO of the ITAA 1936 provided roll-over relief in certain circumstances where a company disposed of an asset to a related company in a relevant income year. For disposals that occurred during the 199X income year, the following requirements in former subsection 160ZZO(1) must be satisfied to be eligible for the roll-over: (a) a company (transferor) disposes of an asset (roll-over asset) to another company (transferee), and the residency requirements are satisfied. There are four ways the residency requirements can be satisfied, including where the transferor and the transferee are residents of Australia at the time of the disposal (b) the transferee is related to the transferor when the disposal takes place in accordance with former section 160G of the ITAA 1936 (ba) the roll-over asset is not trading stock of the transferee immediately after it acquires the asset (bb) if the roll-over asset is a right, option or convertible note, any asset acquired by the transferee as a result of exercising the right, option or convertible note (derived asset) must not be trading stock of the transferee immediately after it acquires the derived asset (c) the transferee is not exempt from tax in the year of income in which the disposal took place by virtue of a relevant exempting provision in former subsection 160K(1), and (d) the transferor and transferee must give notice in writing to the Commissioner that they have elected former section 160ZZO to apply to the disposal. The notice must be given on or before the date of lodgement of the return of the transferor for the year of income in which the disposal took place, or within such further period as the Commissioner allows. If all of the above requirements are met, the capital gains provisions in Part IIIA (other than section 160ZZO) and Division 19A do not apply in respect of the disposal. If the roll-over asset was acquired by the transferor before 20 September 1985, former paragraph 160ZZO(1)(e) of the ITAA 1936 provides that the transferee is deemed to have acquired the roll-over asset before that date. A company will be related to another company under former section 160G of the ITAA 1936 if: (a) one of the companies is a subsidiary of the other company, or (b) each of the companies is a subsidiary of the same company. A company (subsidiary company) is a subsidiary of another company (holding company) under former subsection 160G(2) of the ITAA 1936 if: (a) all the shares in the subsidiary company are beneficially owned by either the holding company, one or more subsidiaries of the holding company, or both the holding company and one or more of its subsidiaries, and (b) no person is in a position to affect rights of the holding company or its subsidiaries in relation to the subsidiary company. Former subsection 160G(4) of the ITAA 1936 provides that a person shall be taken to be in a position to affect any rights of a company in relation to another company if that person has a right, power or option to acquire those rights or do an act or thing that would prevent the first-mentioned company from exercising those rights for its own benefit or receiving any benefits accruing by reason of those rights. Former subsection 160G(3) of the ITAA 1936 provides that where a company is a subsidiary of another company, every subsidiary of the first-mentioned company will also be a subsidiary of that other company. This includes companies that are subsidiaries by virtue of the application of this subsection. | Detailed Reasoning - Application to your circumstances: Company A disposed of an asset to Company B during the 199X income year. In accordance with former paragraph 160ZZO(1)(a) of the ITAA 1936, Company B is the transferee, Company A is the transferor and the asset is the roll-over asset. As Company A and Company B were Australian tax residents at the time of the disposal, the requirement in former paragraph 160ZZO(1)(a) of the ITAA 1936 is satisfied. Company A beneficially owned all of the shares in Company B at the time of the disposal. It has also been confirmed that no person was in a position to affect rights of Company A in relation to Company B in accordance with former subsection 160G(4) of the ITAA 1936 at that time. On this basis, Company B was a subsidiary of Company A and was therefore related to Company A under former section 160G at the time of the disposal. This satisfies the requirement in former paragraph 160ZZO(1)(b). Company B did not hold the asset as trading stock immediately after it was acquired from Company A. The asset was also not a right, option or convertible note. This satisfies the requirements in former paragraphs 160ZZO(1)(ba) and 160ZZO(1)(bb) of the ITAA 1936. Company B is a fully taxed Australia resident company. It is not exempt from tax by virtue of a relevant exempting provision listed in former subsection 160K(1) of the ITAA 1936. This satisfies the requirement in former paragraph 160ZZO(1)(c). It has been accepted that Company A and Company B notified the Commissioner in writing of their election to apply former section 160ZZO of the ITAA 1936 to the disposal of an asset. This notification was given to the Commissioner before the lodgement date of Company A's income tax return for the 199X income year. This satisfies the requirement in former paragraph 160ZZO(1)(d) of the ITAA 1936. As all the requirements in former section 160ZZO of the ITAA 1936 that applied when Company A disposed of the asset to Company B during the 199X income year have been satisfied, the roll-over applied to the disposal of the asset. As Company A acquired the asset before 20 September 1985, when Company B acquired the asset it was deemed to have acquired it before 20 September 1985 in accordance with former paragraph 160ZZO(1)(e).

Company A and Company B are both Australian resident companies. | Company A has beneficially owned 100% of the shares in Company B since it was incorporated. | Company A acquired an asset before 20 September 1985. Company A transferred the asset to Company B during the 199X income year. | Company A contends that a written notice of an election under former section 160ZZO of the ITAA 1936 was given to the Commissioner on or before the lodgment date of its income tax return for the 199X income year. Company A and Company B have provided evidence to support this contention. | No person was in a position to affect rights of Company A in relation to Company B in accordance with former subsection 160G(4) of the ITAA 1936 when Company B acquired the asset from Company A. | The asset was not trading stock immediately after Company B acquired it from Company A. The asset was not a right, option or convertible note | Question 1: Did Company A and Company B meet the conditions to access the roll-over in former section 160ZZO of the ITAA 1936 when Company A transferred an asset to Company B on during the 199X income year?