Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 8/9)
Character Range: 2030733–2033499

covering a specialist topic) that tell you each situation that may result in a modification to the general rules.
 (5) Subdivision 112‑C (which is a guide) explains what a replacement‑asset roll‑over is and how it can modify the cost base or reduced cost base.
 (6) Subdivision 112‑D (which is a guide) explains what a same‑asset roll‑over is and how it can modify the cost base or reduced cost base.
 (7) Section 230‑505 provides special rules for working out the amount of consideration for an asset if the asset is a *Division 230 financial arrangement or a Division 230 financial arrangement is involved in that consideration.

Subdivision 112‑A—General modifications

Table of sections
112‑15 General rule for replacement modifications
112‑20 Market value substitution rule
112‑25 Split, changed or merged assets
112‑30 Apportionment rules
112‑35 Assumption of liability rule
112‑36 Acquisitions of assets involving look‑through earnout rights
112‑37 Put options

112‑15  General rule for replacement modifications
  If a cost base modification replaces an element of the *cost base of a *CGT asset with an amount, this Part and Part 3‑3 apply to you as if you had paid that amount.
Example: An individual pays $10,000 to acquire an option. The individual dies and the option devolves to his legal personal representative, who exercises the option.
 Section 134‑1 applies to the legal personal representative as if the representative had paid $10,000 for the option.

112‑20  Market value substitution rule
 (1) The first element of your *cost base and *reduced cost base of a *CGT asset you *acquire from another entity is its *market value (at the time of acquisition) if:
 (a) you did not incur expenditure to acquire it, except where your acquisition of the asset resulted from:
 (i) *CGT event D1 happening; or
 (ii) another entity doing something that did not constitute a CGT event happening; or
 (b) some or all of the expenditure you incurred to acquire it cannot be valued; or
 (c) you did not deal at *arm's length with the other entity in connection with the acquisition.
The expenditure can include giving property: see section 103‑5.
 (2) Despite paragraph (1)(c), if:
 (a) you did not deal at *arm's length with the other entity; and
 (b) your *acquisition of the *CGT asset resulted from another entity doing something that did not constitute a CGT event happening;
the *market value is substituted only if what you paid to acquire the CGT asset was more than its market value (at the time of acquisition).
The payment can include giving property: see section 103‑5.
 (3) There are some situations in which the rule in subsection (1) does not apply. They include the situations set out in this table:

Exceptions to the market value substitution