1 Will CGT event A1 (section 104-10) happen at the time the original entity enters into the Agreement as a result of the operation of clause xx?
Yes. Question 2 Will the capital proceeds, pursuant to section 116-20, for the disposal of the assets resulting from entry into the Agreement be $xx? Answer Yes. Question 3 Is the asset a depreciating asset for the purposes of Division 40? Answer Yes. Question 4 Will a balancing adjustment event occur under subsection 40-295(1) on completion of the Agreement? Answer Yes. Question 5 Will the termination value, pursuant to section 40-300, for the disposal of the rights to exploit the asset be $xx? Answer Yes. Question 6 Will the original entity be required to apportion its adjustable value of the asset on a reasonable basis pursuant to section 40-205 and subsection 40-115(3)? Answer Yes. Question 7 Will section 118-24 apply to disregard a capital gain the original entity made in relation to the disposal of the asset to the extent that the gain is dealt with under a Division 40 balancing adjustment? Answer Yes. Question 8 Will the entities be eligible for roll-over relief under Division 615 on any gain realised on the transfer of their shares in original entity to the new entity? Answer Yes.
The Commissioner has ruled in relation to a restructure which involved the original entity transferring assets to an entity and a new entity being interposed between the original entity and its shareholders.
Income Tax Assessment Act 1997 section 104-10 Income Tax Assessment Act 1997 section 116-20 Income Tax Assessment Act 1997 section 118-24 Income Tax Assessment Act 1997 Division 40 Income Tax Assessment Act 1997 subsection 40-115(3) Income Tax Assessment Act 1997 section 40-205 Income Tax Assessment Act 1997 subsection 40-295(1) Income Tax Assessment Act 1997 section 40-300 Income Tax Assessment Act 1997 Division 615