Income tax: capital gains: is roll-over available under Subdivision 124-B of the Income tax Assessment Act 1997 for the loss or destruction of a CGT asset if an asset is damaged?

No. Loss or destruction does not include damage. Subdivision 124-B of the Income Tax Assessment Act 1997 does not apply to a damaged CGT asset unless the damage done to the asset is so extensive that the asset or a discrete part of the asset can be considered lost or destroyed.

The keel of a yacht is destroyed. The yacht is damaged, though not destroyed. However, the keel, as a discrete part of the yacht, is destroyed and roll-over is available.

A holiday home is totally reduced to rubble as a result of a tropical cyclone. Roll-over is available for the destruction of the home. However, if only part of the house is damaged during the cyclone, roll-over is not available because the house has not been destroyed.