Document ID: chunk:federal_register_of_legislation:C2010C00612:clause:1_1:p7
Version: federal_register_of_legislation:C2010C00612
Segment Type: clause
Provision Reference: sch 1 cl 1 (pt 7/19)
Character Range: 16562–19182

cannot be active assets:
 (a) interests in an entity that is *connected with you, other than *shares and interests covered by subsection (3);
 (b) shares in companies, other than shares covered by subsection (3);
 (c) interests in trusts, other than interests covered by subsection (3);
 (d) financial instruments (such as loans, debentures, bonds, promissory notes, futures contracts, forward contracts, currency swap contracts and a right or option in respect of a share, security, loan or contract);
 (e) an asset whose main use in the course of carrying on the *business mentioned in subsection (1) is to derive interest, an annuity, rent, royalties or foreign exchange gains unless:
 (i) the asset is an intangible asset and has been substantially developed, altered or improved by you so that its market value has been substantially enhanced; or
 (ii) its main use for deriving rent was only temporary.

Example: A company uses a house purely as an investment property and rents it out. The house is not an active asset because the company is not using the house in the course of carrying on a business. If, on the other hand, the company ran the house as a guest house the house would be an active asset because the company would be using it to carry on a business and not to derive rent.

152‑45  Continuing time periods for involuntary disposals

Compulsory acquisitions

 (1) If a *CGT asset is an asset (the new asset) you acquired to satisfy the requirement in subsection 124‑70(2) or 124‑75(2) for a roll‑over under Subdivision 124‑B, then the active asset test in section 152‑35 applies as if:
 (a) you had acquired the new asset when you acquired the old asset; and
 (b) the new asset had been your *active asset at all times when the original asset was your active asset; and
 (c) the new asset had not been your active asset at all times when the original asset was not your active asset.

Note 1: Subdivision 124‑B allows you to choose a roll‑over if your CGT asset is compulsorily acquired, lost or destroyed.

Note 2: If this subsection applies to a CGT asset, then section 152‑115 (which is about continuing time periods) will apply for the 15‑year exemption.

Marriage breakdowns

 (2) If you were the transferee of a *CGT asset for which there has been a roll‑over under Subdivision 126‑A, then you may choose that the active asset test in section 152‑35 applies as if:
 (a) you had acquired the asset when the transferor acquired the asset; and
 (b) the asset had been an *active asset of yours at all times when the asset was an active asset of the transferor; and
 (c) the asset had not been