Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p28
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 28/59)
Character Range: 2601791–2604444

of the roll‑over may be reversed if the transferor does not cease to exist within 6 months: see section 104‑195.
 (2) You must make the choice for each of your original interests.
 (3) An entity that is a foreign resident cannot choose a roll‑over under this section unless the replacement interests the entity *acquires in the transferee are *taxable Australian property just after their acquisition.
 (4) If you choose a roll‑over, you cannot make a *capital loss from a *CGT event that happens to your original interests during the *trust restructuring period.
Note: The rule in subsection (4) prevents a capital loss arising on your units or interests after the trust assets have been disposed of to the company but before your shares are issued to you.

Exception: trading stock
 (5) This section does not apply to your ownership of an original interest ending if:
 (a) the interest was an item of your *trading stock and the corresponding replacement interest becomes an item of your trading stock when you *acquire it; or
 (b) the interest was not an item of your trading stock but the corresponding replacement interest becomes an item of your trading stock when you acquire it.

124‑875  Effect on the transferor and transferee

Capital gains and losses disregarded
 (1) Any *capital gain or *capital loss from *CGT event A1 happening to the transferor under the trust restructure is disregarded (even if *CGT event J4 applies).
Note: The effect of the roll‑over may be reversed if the transferor does not cease to exist within 6 months: see section 104‑195.

Cost base is transferred
 (2) The first element of the *cost base and *reduced cost base (for the transferee) of each *CGT asset that the transferee *acquires under the trust restructure is the same as the cost base and reduced cost base of that asset (for the transferor) just before that acquisition.
Note: For the cost base and reduced cost base of interests in the transferee: see Subdivision 124‑A.

Pre‑CGT assets retain their status
 (3) If the transferor *acquired any of the *CGT assets *disposed of to the transferee under the trust restructure before 20 September 1985, the transferee is taken to have acquired it before that day.
 (4) However, subsection (3) is taken never to have applied to such an asset of the transferee if subsection 104‑195(4) (CGT event J4) applies to the transferee in relation to the asset.

Exception: trading stock
 (5) This section does not apply to a *CGT asset if:
 (a) the asset was an item of *trading stock of the transferor and becomes an item of trading stock of the transferee; or
 (b) the asset was not an item of trading stock of the