Income tax: capital gains: if there is more than one increased value share in a share value shift, can the formulas in Division 19B of Part IIIA of the Income Tax Assessment Act 1936 be applied to just one of the increased value shares?
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FOI status:may be releasedFOI number: I 1015883
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1. No. The formulas contained in sections 160ZZRP and 160ZZRQ have to be applied in turn to each of the increased value shares.
2. Subsection 160ZZRP(1) applies (assuming the requirements of section 160ZZRL are satisfied) if 'a particular increased value share' is a pre-CGT share. If there is more than one increased value share which is a pre-CGT share, the formulas contained in section 160ZZRP have to be applied to each of those shares in turn. Similarly, subsection 160ZZRQ(1) refers to 'a particular increased value share' which is a post-CGT share so that, if there is more than one such share, the formulas in section 160ZZRQ have to be applied to each one.
The controller of a company has two classes of shares:
(Increase in market value of each Class B share / Total market value increase of all Class B shares) x Decrease in market value of the Class A share
($30 / $1500) x $15 = 30 cents
$80 x (30 cents / $100) = 24 cents
30 cents - 24 cents = 6 cents
6 cents x 50 shares = $3.00
(Increase in market value of each Class B share / Total market value increase of all Class B shares) x (Decrease in market value of the Class A share / Market value of Class A share before the decrease)
($30 / $1500) x ($15 / $100)
$80 * (3/1000 * 50) = $12
Commissioner of Taxation
Previously issued as Draft TD 94/D104
NO 94/4369-0 (CGDET 107)
increased value share;
share value shift
ITAA Pt IIIA-Div 19B;
|22 June 1995||Original ruling|
|You are here||29 November 2006||Original ruling + note||Repeal provision note|