Document ID: chunk:federal_register_of_legislation:C2025C00014:section:438:p1
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 438 (pt 1/3)
Character Range: 2049542–2052226

438  Roll‑overs—asset disposals
 (1) This section applies in determining the application of paragraph 434(1)(b) and section 445 in relation to a non‑taxable Australian asset of a company.
 (2) If a CGT roll‑over provision applies to:
 (a) the disposal of the asset by an entity (in this section called the transferor) to the company (in this section called the transferee); or
 (b) the disposal of the asset by the company (in this section also called the transferor) to another entity (in this section also called the transferee);
the following provisions have effect:
 (c) the transferee is taken to have paid, as consideration to acquire the asset, the sum of:
 (i) the consideration (if any) paid or payable by the transferor to acquire the asset; and
 (ii) the expenditure (if any) incurred by the transferor in making capital improvements to the asset; and
 (d) the transferor is not taken to have:
 (i) derived any gains; or
 (ii) incurred any loss;
  in respect of the disposal of the asset.
 (2A) If:
 (a) a CGT roll‑over provision applies to the disposal of the asset (in this subsection called the original asset) by the company; and
 (b) the disposal is not to another entity; and
 (c) the company acquires another asset (in this subsection called the replacement asset) that is referred to in the CGT roll‑over provision as being by way of replacement of, substitution for, or consideration for the disposal of, the original asset (whether or not exactly those expressions are used);
the following provisions have effect:
 (d) the company is not taken to have:
 (i) derived any gains; or
 (ii) incurred any loss;
  in respect of the disposal of the original asset; and
 (e) the company is taken to have paid, as consideration to acquire the replacement asset, the sum of:
 (i) the consideration (if any) paid or payable by the company to acquire the original asset; and
 (ii) the expenditure (if any) incurred by the company in making improvements to the original asset.
 (2B) For the purposes of subsections (2) and (2A), if an asset is disposed of by being cancelled, redeemed or consolidated into another asset, the disposal is taken not to be to another entity.
 (3) For the purposes of this section, in determining whether a CGT roll‑over provision applies to the disposal of an asset, Parts 3‑1 and 3‑3 of the Income Tax Assessment Act 1997 have the effect they would have if:
 (a) the company had failed the active income test in relation to the statutory accounting period concerned; and
 (b) those Parts were being applied to calculate the attributable income of the company for the statutory accounting period in relation to any taxpayer.
 (3A) For the purposes