Document ID: chunk:federal_register_of_legislation:C2020C00244:clause:1_9:p3
Version: federal_register_of_legislation:C2020C00244
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 3/8)
Character Range: 16823–19431

for either of the trusts in relation to particular circumstances; and
 (b) the same choice (however described) under that provision for the other trust in relation to those circumstances (a mirror choice) is not also in force; and
 (c) the absence of a mirror choice would or could have an ongoing effect on the calculation of an entity's *net income, or taxable income, for:
 (i) the entity's income year that includes the transfer time; or
 (ii) a later income year.
 (4) However, the exception in subsection (3) does not apply if:
 (a) the other trust makes a mirror choice before the first time after the transfer time when the absence of the mirror choice would affect the calculation of an entity's *net income, or taxable income, for an income year; or
 (b) it would not be reasonable for subsection (3) to apply.
Note: For paragraph (a), the other trust must still be able, under the relevant provision of the taxation law, to make the mirror choice.
 (5) If, just after the transfer time:
 (a) a choice (however described) referred to in paragraph (3)(a) is in force for either of the trusts (the first choice); and
 (b) a provision of a *taxation law:
 (i) prevents the revocation or variation of that choice; or
 (ii) sets out a consequence for an entity if that choice is revoked or varied;
that provision is taken to apply for a mirror choice, in force for the other trust at or after that time, in a way corresponding to the way in which it applies for the first choice.
Note: For example, if the provision sets out consequences that flow from the revocation of the first choice, then those consequences will also flow if the mirror choice is revoked.

126‑240  Consequences for the trusts

Disregard any capital gain or loss
 (1) If the roll‑over is chosen, disregard any *capital gain or *capital loss the trustee of the transferring trust makes from:
 (a) creating the receiving trust over the roll‑over asset; or
 (b) transferring the roll‑over asset to the receiving trust;
at the transfer time.

Adjust roll‑over asset's cost base and reduced cost base
 (2) If the roll‑over is chosen:
 (a) the first element of the roll‑over asset's *cost base, in the hands of the receiving trust, is its cost base just before the transfer time; and
 (b) the first element of the roll‑over asset's *reduced cost base is worked out similarly.

Any pre‑transfer losses of receiving trust cannot be utilised
 (3) If the roll‑over is chosen:
 (a) any *net capital loss of the receiving trust for an income year ending before the transfer time cannot be applied after the transfer time to reduce an amount of