Income Tax Assessment Act 1997

Part 3-3 inserted by No 46 of 1998.

Div 124 inserted by No 46 of 1998.

Div 124 inserted by No 165 of 1999.

S 124-784C substituted by No 135 of 2015, s 3 and Sch 1 item 11, applicable in relation to CGT events happening after 7:30 pm, by legal time in the Australian Capital Territory, on 8 May 2012. S 124-784C formerly read:

SECTION 124-784C Cost base of equity or debt given by acquiring entity to ultimate holding company  
Purpose

124-784C(1)
This section allocates an appropriate *cost base to equity issued, or new debt owed, by an acquiring entity under the *arrangement to the *ultimate holding company of a *wholly-owned group where the cost base of the acquiring entity for a qualifying interest was worked out under section 124-784B .

Allocation of cost base

124-784C(2)
The first element of the *cost base of the equity or debt for the *ultimate holding company is that part of the cost base of the qualifying interest worked out under section 124-784B as:

(a) may be reasonably allocated to the equity or debt; and

(b) is not more than the *market value of the equity or debt at the completion time.

No capital gain on debt repayment

124-784C(3)
Any *capital gain of the *ultimate holding company from the repayment of new debt owed by an acquiring entity under the *arrangement is disregarded to the extent that it relates to the difference between the part of the *cost base worked out under section 124-784B and the *market value of the debt at the completion time.

Note:

If the debt is assigned or exchanged, there may be a capital gain.

S 124-784C inserted by No 14 of 2009, s 3 and Sch 1 item 2, effective 26 March 2009. For application provision, see note under s 112-53 .