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StevePSTA(Newbie)Newbie
28 Nov 2023

Property to be sold is a farm used for primary production which is owned by a company with more than 6M in assets (so not a small business). Intention is to replace with another farm property after first property sold. Is the Capital Gain on the first property sale eligible to be rolled over?

If not, why?

If so;

What is the time limit to replace the property?

If the new property is less than the sale value of the previous property, can CGT be rolled or does entire sale value need to be re-invested? (ie old property bought for $1M, sold for $2M, so $1M taxable as CG, but replacement property only costs $1M).

Would the CG that is rolled over only become reportable/ CGT payable once the new property is sold?



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1,041 views
3 replies

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Most helpful reply

CaroATO(Community Support)Community Support
29 Nov 2023

Hi @StevePSTA,


A small business entity can be a company that's carrying on a business with an aggregated turnover of less than $10 Million.


There're some basic eligibility conditions you'll need to work out if you meet to determine if you can roll-over your CGT.


You don't need to acquire a new farm to do the roll-over. You've 2 years after the GST event which starts one year before the last CGT event in the income year you apply the roll-over. There's what's called look-through earnout right arrangements you can explore using if you're not sure of the value of the farm.


Let's say you're only going to apply the roll-over to some of the capital gain, what's left over you'll need to pay CGT.


Have a look at the information in the links I've provided and if you need further assistance, have a think about having a chat with our tailored technical assistance team.

All replies

Most helpful reply

CaroATO(Community Support)Community Support
29 Nov 2023

Hi @StevePSTA,


A small business entity can be a company that's carrying on a business with an aggregated turnover of less than $10 Million.


There're some basic eligibility conditions you'll need to work out if you meet to determine if you can roll-over your CGT.


You don't need to acquire a new farm to do the roll-over. You've 2 years after the GST event which starts one year before the last CGT event in the income year you apply the roll-over. There's what's called look-through earnout right arrangements you can explore using if you're not sure of the value of the farm.


Let's say you're only going to apply the roll-over to some of the capital gain, what's left over you'll need to pay CGT.


Have a look at the information in the links I've provided and if you need further assistance, have a think about having a chat with our tailored technical assistance team.

Liked by StevePSTA
StevePSTA(Newbie)Newbie
12 Dec 2023

Just to be clear, the rollover function is only available if the company meets the small business criteria? i.e. there is no provision to rollover CGT if we're not a small business? The turnover of the company in question is less than $10M, but affiliated companies (other companies owned solely by the individual who solely owns this company) have turnover well over this threshold.

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Can CGT be rolled over when company sells property and replaces with another property? | ATO Community