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Item 6

Last updated 26 November 2009

This question is concerned with any dealings of a capital nature that have occurred between you and an international related party. These capital dealings are those that you would have included at items 2a to 2d, but not those dealings which concern trading stock in the ordinary course of business.

If you print N for no at item 6a, disregard items 6b and 6c and go to item 7.

Item 6a

This question requires either Y for yes or N for no. You should answer yes if you have acquired an interest in an asset as a result of dealings of a non-revenue (capital) nature with international related parties, or if you have had dealings with an international related party that would be classified as a capital gains tax (CGT) event in terms of Part 3-1 of the ITAA 1997.

The words 'acquired', 'CGT event', 'disposal' and 'asset' are used in this item in the context of Part 3-1 of the ITAA 1997. The question does not refer to trading stock held in the ordinary course of business.

Item 6b

Where you have acquired capital assets from, or have disposed of capital assets to, international related parties, use the codes below to indicate the four principal methods you used for pricing those acquisitions or disposals. Record the methods you used by placing the appropriate codes in each space at Q in descending order of total dollar value, starting at the left-hand side.

If you used fewer than four methods leave the remaining spaces blank.

Pricing method


Nil consideration


Cost price


Written-down value


Discounted cash flow


Director's valuation


Independent valuation


Quoted market price


Other methods


Cost price refers to the price the seller originally paid for the asset, including ancillary costs such as freight or handling.

Written-down value refers to a pricing method based on either the taxation 'adjustable value' or accounting residual value after depreciation has been allowed.

Discounted cashflow is a pricing method where the price of an asset is based on the discounted cash flow at the time of acquisition or disposal.

Director's valuation refers to a pricing method that is based on the directors' opinion of an asset's value, and not on any of the other methods listed in codes 1 to 8.

Independent valuation is a pricing method by which a suitably qualified person, acting at arm's length to both the buyer and seller, assesses the value of an asset.

Quoted market price refers to a price quoted on a public listed market, such as a public stock exchange, or commodities market.

Other methods means any other pricing method that is not mentioned in item 6.

The above pricing methods may not provide an arm's length price under all circumstances. The above examples are not an exhaustive list and the appropriate choice of method must be based on the particular circumstances of the dealings.

Item 6c

This item requires you to identify the percentage of your related-party international dealings that are capital in nature.

Use the codes in the table below to show the total international related-party acquisitions and disposals of capital assets as a percentage of the total value of related-party international dealings of both a revenue and non-revenue (or capital) nature. Print the code at R.

Total of related-party acquisitions and disposals of capital assets as a percentage of the total of related-party dealings - items 2a to 2d only





1% to less than 25%


25% to less than 50%


50% to less than 75%


75% to less than 100%




As in the instructions for item 4, you only need to estimate the percentage, provided the estimate is objectively and rationally determined using, for example, a sampling technique based on accepted statistical methods. Keep your working papers that relate to item 6c.