INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 19A - Transfers of assets between companies under common ownership  

Subdivision D - Depreciable assets  

SECTION 160ZZRDJ   SHARES IN, AND LOANS TO, TRANSFEROR - DEPRECIABLE ASSETS - DEEMED DISPOSAL  

160ZZRDJ(1)   [Shares acquired on or after 20 September 1985]  

This section applies to each share in the transferor acquired by a taxpayer (the second taxpayer ) on or after 20 September 1985 that is held by the second taxpayer at the first asset disposal time.

160ZZRDJ(2)   [Share disposed for consideration equal to indexed cost base]  

For each share to which this section applies, the second taxpayer is taken to have disposed of the share at the first asset disposal time for a consideration equal to the indexed cost base to the second taxpayer of the share.

160ZZRDJ(3)   [Capital gain on subsequent disposal of share]  

For the purpose of ascertaining whether a capital gain accrued to the second taxpayer in the event of a subsequent disposal of the share by the second taxpayer, the second taxpayer is taken to have immediately re-acquired the share for a consideration equal to the indexed cost base to the second taxpayer of the share, reduced by the share reduction amount (see subsection (5)).

160ZZRDJ(4)   [Capital loss on subsequent disposal of share]  

For the purpose of ascertaining whether the second taxpayer incurred a capital loss in the event of a subsequent disposal of the share by the second taxpayer, the second taxpayer is taken to have immediately re-acquired the share for a consideration equal to the reduced cost base to the second taxpayer of the share, reduced by the share reduction amount (see subsection (5)).

160ZZRDJ(5)   [Share reduction amount]  

The share reduction amount is worked out, immediately before the first asset disposal time, using the formula:

Graphic

160ZZRDJ(6)   [Share disposed of within 12 months of acquisition]  

If the second taxpayer or another taxpayer disposed of a share (otherwise than because of the application of this section) within 12 months after the taxpayer acquired the share (otherwise than because of the application of this section), subsections (2) and (3) have effect as if the references to the indexed cost base to the taxpayer in respect of the share were a reference to the cost base to the taxpayer in respect of the share.


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