Document ID: chunk:federal_register_of_legislation:C2007A00055:clause:1_12:p1
Version: federal_register_of_legislation:C2007A00055
Segment Type: clause
Provision Reference: sch 1 cl 12 (pt 1/3)
Character Range: 4266–6842

12  Sections 104‑185 and 104‑190
Repeal the sections, substitute:

104‑185  Change in relation to replacement asset or improved asset after a roll‑over under Subdivision 152‑E: CGT event J2

 (1) CGT event J2 happens if you choose a small business roll‑over under Subdivision 152‑E for a *CGT event that happens in relation to a *CGT asset in an income year and:
 (a) you *acquire a replacement asset (the replacement asset), or you incur *fourth element expenditure in relation to a CGT asset (also the replacement asset), or you do both, by the end of the period (the replacement asset period) starting one year before, and ending 2 years after, the last CGT event in the income year for which you obtain the roll‑over; and
 (b) the replacement asset is your *active asset at the end of the replacement asset period; and
 (c) if the replacement asset is a *share in a company or an interest in a trust, at the end of the replacement asset period:
 (i) either you, or an entity *connected with you, is a *CGT concession stakeholder in the company or trust; or
 (ii) CGT concession stakeholders in the company or trust have a *small business participation percentage in you of at least 90%; and
 (d) a change of a kind specified in subsection (2) or (3) happens after the end of the replacement asset period.

Note 1: The replacement asset period may be modified or extended, see section 104‑190.

Note 2: There is an exception: see subsection (8).

Note 3: There may be 2 or more replacement assets.

Note 4: CGT event J2 can also happen in relation to a capital gain you rolled‑over under Division 17A of former Part IIIA of the Income Tax Assessment Act 1936 or Division 123 of the Income Tax Assessment Act 1997 if the status of the replacement asset changes: see section 104‑185 of the Income Tax (Transitional Provisions) Act 1997.

 (2) For any replacement asset that satisfied paragraph (1)(b) and, if applicable, paragraph (1)(c), the change is:
 (a) the asset stops being your *active asset; or
 (b) the asset becomes your *trading stock; or
 (c) you make a testamentary gift of the asset under the Cultural Bequests Program; or
 (d) you start to use the asset solely to produce your *exempt income or *non‑assessable non‑exempt income.

 (3) In addition, for a *share in a company or an interest in a trust, the change is:
 (a) *CGT event G3 or I1 happens in relation to it; or
 (b) paragraph (1)(c) stops being satisfied.

Note: The full list of CGT events is in section 104‑5.

 (4) The time of the event is when the change happens.

 (5) You make a capital gain