Commonwealth Consolidated Acts

TAX LAWS AMENDMENT (2006 MEASURES NO. 4) ACT 2006 - SCHEDULE 2

Income Tax (Transitional Provisions) Act 1997

1   Section   701 - 35 (heading)

Repeal the heading, substitute:

701 - 35   Act, transaction or event giving rise to CGT event for pre - formation roll - over after 16   May 2002 to be disregarded if cost base etc. would be different

2   Paragraph 701 - 35(1)(a)

After "in relation to an asset", insert "(the roll - over asset )".

3   Paragraph 701 - 35(1)(b)

Omit "that asset", substitute "the roll - over asset".

4   Paragraph 701 - 35(1)(b)

Omit "the roll - over had not occurred or there had been no such roll - over relief", substitute "the act, transaction or event that gave rise to the CGT event had not occurred in relation to the roll - over asset".

5   Subsection 701 - 35(1)

Omit "CGT event had not happened", substitute "act, transaction or event had not occurred in relation to the roll - over asset".

6   After subsection 701 - 35(2)

Insert:

  (2A)   Subsection   (1) does not apply if:

  (a)   the act, transaction or event mentioned in subsection   (1) happened before a demerger and in connection with the demerger; and

  (b)   before the transitional group came into existence, at least one of the following entities ceased to be a member of the demerger group because of the demerger:

  (i)   the originating company in relation to the roll - over, or the transferor in relation to the roll - over relief;

  (ii)   the recipient company, or the transferee in relation to the roll - over relief; and

  (c)   when the transitional group came into existence, at least one of those entities was not a member of that group.

7   Paragraph 701 - 35(3)(a)

Omit "the asset mentioned in subsection   (1)", substitute "the roll - over asset".

8   Application

The amendments made by this Schedule apply on and after 1   July 2002.