Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 124.1105

Automatic roll - over for single water entitlements

  (1)   There is a roll - over if:

  (a)   your ownership of a * water entitlement (the original entitlement ) ends, resulting in a * CGT event happening; and

  (b)   as a result of your ownership of the original entitlement ending, you * acquire one or more water entitlements (each of which is a new entitlement ); and

  (c)   if you are a foreign resident just before your ownership of the original entitlement ends, or you are the trustee of a trust that is a * foreign trust for CGT purposes for the income year in which your ownership of the original entitlement ends:

  (i)   the original entitlement was * taxable Australian property just before you stopped owning it; and

  (ii)   if there is only one new entitlement--the new entitlement is taxable Australian property just after you acquire it; and

  (iii)   if there is more than one new entitlement--each new entitlement is taxable Australian property just after you acquire it; and

  (d)   you have not chosen a roll - over in relation to the original entitlement under subsection   (2).

Elective roll - over for bundled water entitlements

  (2)   There is a roll - over if:

  (a)   your ownership of more than one * water entitlement (each of which is an original entitlement ) ends, resulting in a * CGT event happening; and

  (b)   as a result of your ownership of the original entitlements ending, you * acquire one or more water entitlements (each of which is a new entitlement ); and

  (c)   if you are a foreign resident just before your ownership of the original entitlements ends, or you are the trustee of a trust that is a * foreign trust for CGT purposes for the income year in which your ownership of the original entitlements ends:

  (i)   each original entitlement was * taxable Australian property just before you stopped owning it; and

  (ii)   if there is only one new entitlement--the new entitlement is taxable Australian property just after you acquire it; and

  (iii)   if there is more than one new entitlement--each new entitlement is taxable Australian property just after you acquire it; and

  (d)   you choose to obtain the roll - over.

Note:   Section   103 - 25 tells you when the choice must be made.

No roll - over if Subdivision   124 - C applies

  (3)   However, there is no roll - over in relation to a * water entitlement under this section if there is a roll - over in relation to the water entitlement under Subdivision   124 - C (statutory licences).

Meaning of water entitlement

  (4)   A water entitlement is a legal or equitable right that an entity owns that relates to water, including a right to:

  (a)   receive water; or

  (b)   take water from a water resource; or

  (c)   have water delivered; or

  (d)   deliver water;

and includes a right that must be owned by the entity in order to own a right covered by paragraph   (a), (b), (c) or (d).

Example:   Philip owns a share in Big Pump Irrigation Ltd. The share provides Philip with the right to receive dividends, to participate in the running of the company and to have a separate contractual agreement with Big Pump Irrigation Ltd for the delivery of 1 megalitre of water. Philip has such an agreement. Philip's agreement is a water entitlement . Philip's share is also a water entitlement because he must own the share in order to have a contractual arrangement with Big Pump Irrigation Ltd for the delivery of water.