Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p6
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 6/7)
Character Range: 2466221–2468907

of assets—wholly‑owned company
  All of the partners in a partnership can choose to obtain a roll‑over if one of the *CGT events (the trigger event) specified in this table happens involving the partners and a company in the circumstances set out in sections 122‑130 to 122‑140.

Relevant *CGT events
Event No.             What the partners do
A1                    *Dispose of their interests in a *CGT asset of the partnership, or all the assets of a business carried on by the partnership, to the company
D1                    Create contractual or other rights in the company
D2                    Grant an option to the company
D3                    Grant the company a right to income from mining
F1                    Grant a lease to the company, or renew or extend a lease

Note 1: The roll‑over starts at section 122‑150.
Note 2: Section 103‑25 tells you when you have to make the choice.
Example: Michael and Sandra operate a fish shop in partnership. They agree to incorporate the business so they dispose of their interests in all its assets to a company. They are the only shareholders of the company.

122‑130  What the partners receive for the trigger event
 (1) The consideration the partners receive must be only:
 (a) *shares in the company; or
 (b) for a *disposal of their interests in a *CGT asset, or in all the assets of a business, to the company (a disposal case)—shares in the company and the company undertaking to discharge one or more liabilities in respect of their interests.
Note: There are rules for working out what are the liabilities in respect of an interest in an asset: see section 122‑145.
 (2) The *shares cannot be *redeemable shares.
 (3) The *market value of the *shares each partner receives for the trigger event happening must be substantially the same as:
 (a) for a disposal case—the market value of the interests in the asset or assets the partner disposed of, less any liabilities the company undertakes to discharge in respect of the interests in the asset or assets (as appropriate); or
 (b) for another trigger event (a creation case)—the market value of what would have been the partner's interest in the *CGT asset created in the company (the created asset) if it were an asset of the partnership.
 (4) In working out if the requirement in paragraph (3)(a) is satisfied, if the *market value of the *shares is different to what it would otherwise be only because of the possibility of liabilities attaching to the asset or assets, disregard the difference.
Note: The company may have to pay income tax if an amount is included in its assessable income because of a CGT event happening to an asset a partner disposed of, or it may