Document ID: chunk:federal_register_of_legislation:C2005A00078:clause:2_2:p2
Version: federal_register_of_legislation:C2005A00078
Segment Type: clause
Provision Reference: sch 2 cl 2 (pt 2/3)
Character Range: 5884–8428

*capital loss the first RSE trustee makes from each of the *CGT events is disregarded.

 (3) For a successor RSE trustee, the first element of the *cost base of each of the identical assets the successor RSE trustee holds is the cost base of the corresponding asset for the first RSE trustee at the time of the relevant *CGT event.

 (4) For a successor RSE trustee, the first element of the *reduced cost base of each of the identical assets the successor RSE trustee holds is the reduced cost base of the corresponding asset for the first RSE trustee at the time of the relevant *CGT event.

Example: There is a roll‑over if the first RSE trustee had a block of land and 10,000 units in a unit trust and the following events happen on 30 June 2006 because the first RSE trustee does not have an RSE licence but each of the 2 successor RSE trustees (successor RSE trustee A and successor RSE trustee B) does:

(a) the first RSE trustee transfers the block to successor RSE trustee A;

(b) the first RSE trustee's units in the unit trust are cancelled at the first RSE trustee's request;

(c) 10,000 identical units in the unit trust are issued to successor RSE trustee B because of the cancellation.

 The first RSE trustee disregards any capital gain or capital loss from the transfer of the block or the cancellation of the units.

 The first element of successor RSE trustee A's cost base and reduced cost base for the block is the same as the first RSE trustee's cost base and reduced cost base respectively for the block at the time of the transfer.

 The first element of successor RSE trustee B's cost base and reduced cost base for the units issued to successor RSE trustee B is the same as the first RSE trustee's cost base and reduced cost base respectively for its units at the time they were cancelled.

 (5) A successor RSE trustee that starts to hold one of the identical assets because of the cessation is taken to have *acquired the asset before 20 September 1985 if the first RSE trustee acquired the corresponding asset before that day.

Note 1: A capital gain or loss you make from a CGT asset you acquired before 20 September 1985 is generally disregarded: see Division 104. This exemption is removed in some situations: see Division 149.

Note 2: Subsection (5) cannot apply if the first RSE trustee was the trustee of a complying superannuation fund, complying approved deposit fund or pooled superannuation trust. This is because section 306 of the Income Tax Assessment Act 1936 treats such a trustee as having acquired