Income tax: capital gains: is the expression 'a State law, Territory law or foreign law relating to de facto marriage breakdowns' in paragraphs 126-5(1)(c) and 126-15(1)(c) of the Income Tax Assessment Act 1997 restricted to State, Territory or foreign legislation?

Yes.

The reference to 'a State law, Territory law or foreign law' in paragraphs 126-5(1)(c) and 126-15 (1)(c) of the Income Tax Assessment Act 1997 is confined to statutory law of a State, Territory or foreign country and does not extend to the law generally in a State, Territory or foreign country.

The effect of this is that a CGT event which happens because of a court order relating to de facto marriage breakdown, only qualifies for roll-over if it happens because of a court order made under the statutory law of a State, Territory or foreign country relating to de facto marriage breakdowns.

Roll-over is, therefore, only available in those States, Territories and foreign countries that have made specific legislative provision for de facto marriage breakdowns.

This construction is supported by the fact that paragraphs 126-5(1)(c) and 126-15 (1)(c) refer to 'a' State law, Territory law or foreign law and do not refer to 'the' law of a State, Territory or foreign country. Under subsection 995-1(1), except so far as a contrary intention appears, 'State law' means 'a law of a State', 'Territory law' means 'a law of a Territory' and 'foreign law' means 'a law of a foreign country'. It is also supported by the explanatory memorandum to the Taxation Laws Amendment Bill (No 2) 1992 which states that roll-over will extend to 'the transfer of assets on the breakdown of de facto marriages where a State, Territory or foreign country has legislated to allow the court to order such a transfer'.