CAPITAL GAINS AND CAPITAL LOSSES
Transfers of assets between companies under common ownership
Outline and interpretation
OUTLINE OF DIVISION
[Adjustment of cost bases of shares and loans]
This Division adjusts the cost bases of shares and loans in certain cases where assets are transferred between companies under common ownership and the transfer is likely to reduce the value of the share or loan.
There are detailed rules for the circumstances in which adjustments are made and the amount of those adjustments.
The rules that apply to most depreciable assets are different from the rules that apply to transfers of other assets.
Taxpayers are able to group certain assets before applying this Division. In some cases, this
result in no adjustment being required and in some other cases it
result in a lesser reduction being required. Taxpayers may also choose to group certain assets for administrative convenience.
The following chart shows the operative provisions that
apply to particular assets: