Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 2/6)
Character Range: 2102207–2104832

of roll‑overs) is at least 12 months.

Replacement asset roll‑overs
 (5) The 12 month rule is satisfied for an entity obtaining a *replacement‑asset roll‑over for a *CGT event happening in relation to a *CGT asset if the period of the entity's ownership of the original asset (and of other assets for an unbroken series of replacement‑asset roll‑overs) and of the replacement asset are together at least 12 months.
Example: Company A transfers a CGT asset to Company B (which is a member of the same wholly‑owned group and a foreign resident) 5 months after acquiring it. There is a roll‑over for the transfer under Subdivision 126‑B.
 Company B sells the asset 8 months after the transfer.
 Company A indexes expenditure in its cost base up to the transfer. That cost base becomes the first element of Company B's cost base. Company B indexes its cost base from the transfer to the sale.

Deceased estates
 (6) If a *CGT asset you owned just before dying devolves to your *legal personal representative or *passes to a beneficiary in your estate, the 12 month rule applies to the legal personal representative or the beneficiary as if that entity had *acquired the asset when you acquired it.

Surviving joint tenant
 (7) If individuals own a *CGT asset as joint tenants and one of them dies, the 12 month rule applies to the surviving joint tenant as if the surviving joint tenant had *acquired the deceased's interest in the asset when the deceased acquired it.
Note: The surviving joint tenant is taken to have acquired the deceased's interest in the asset: see section 128‑50.

CGT event J1
 (8) If *CGT event J1 happens, the company that owns the roll‑over asset ignores (for indexation purposes) the acquisition rule in subsection 104‑175(8).

114‑15  Cost base modifications
 (1) There are a number of modifications to the *cost base of *CGT assets (see sections 112‑20 and 112‑35 and Subdivisions 112‑B, 112‑C and 112‑D). These affect the way indexation works.
 (2) If a cost base modification replaces an element of the *cost base of a *CGT asset with an amount, or includes an amount in such an element, you index the element or the amount as if expenditure equal to the amount had been incurred in the *quarter in which the modification occurred.
Example: A trust is declared over a CGT asset (an example of CGT event E1). The first element of the cost base in the hands of the trustee is its market value. The trustee indexes that market value from the quarter in which the trust was declared.
 (3) A different rule applies if a cost base modification reduces the total *cost base of a *CGT asset.

      Method