Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_2:p2
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 2/3)
Character Range: 420491–423463

126‑B—Companies in the same wholly‑owned group

Guide to Subdivision 126‑B

126‑40  What this Subdivision is about

      This Subdivision sets out when a company can obtain a roll‑over if it transfers a CGT asset to, or creates a CGT asset in, another company that is a member of the same wholly‑owned group.

Table of sections

Operative provisions

126‑45 Roll‑over for members of wholly‑owned group
126‑50 Requirements for roll‑over
126‑55 When there is a roll‑over
126‑60 Consequences of roll‑over
126‑65 Choosing for no roll‑over in loss situation
126‑70 Loss disregarded if intention not realised
126‑75 Originating company is a CFC
126‑80 Roll‑over asset is an interest in a CFC or FIF
126‑85 Effect of roll‑over on certain liquidations

[This is the end of the Guide.]

Operative provisions

126‑45  Roll‑over for members of wholly‑owned group

 (1) There may be a roll‑over if a *CGT event (the trigger event) happens involving a company (the originating company) and another company (the recipient company) in the circumstances set out in section 126‑50.

 (2) Only these *CGT events are relevant:

 (a) CGT events A1 and B1 (a disposal case); and

 (b) CGT events D1, D2, D3 and F1 (a creation case).

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

 (3) However, there is no roll‑over for *CGT event B1 if title in the *CGT asset does not pass to the transferee when the agreement ends.

Note: CGT event J1 can happen if the recipient company stops being a 100% subsidiary of a company in the relevant group: see section 104‑175.

126‑50  Requirements for roll‑over

 (1) The originating company and recipient company must be members of the same *wholly‑owned group at the time of the trigger event.

Note: This requirement is taken to be satisfied in the case of the transfer of the life insurance business of a life insurance company: see section 121AS of the Income Tax Assessment Act 1936.

 (2) The *CGT asset involved (the roll‑over asset) must not be *trading stock of the recipient company just after the time of the trigger event.

 (3) If:

 (a) the roll‑over asset is a right, option or *convertible note; and

 (b) the recipient company *acquires another *CGT asset by exercising the right or option or by converting the convertible note;

the other asset cannot become *trading stock of the recipient company just after the recipient company acquired it.

 (4) The *ordinary income and *statutory income of the recipient company must not be exempt from income tax because of Division 50 for the income year of the trigger event.

 (5) The requirements in one of the items in this table must be satisfied.

Additional requirements
                         The originating company's residency status                             The recipient company's residency status
                                                                                                                                          This