Income Tax Assessment Act 1997
The CGT consequences for you of a * direct value shift are of one or more of these 3 kinds: (a) there are one or more * taxing events generating a gain for * down interests of which you are an affected owner (see subsection (2) ); (b) the * cost base and * reduced cost base of down interests of which you are an * affected owner are reduced (see subsection (3) ); (c) the cost base and reduced cost base of * up interests of which you are an affected owner are uplifted (see subsection (4) ).
If there is a taxing event generating a gain, CGT event K8 happens. See section 104-250 .
To work out: (a) whether under the table in section 725-245 there is a * taxing event generating a gain for you on a * down interest; and (b) if so, the amount of the gain;
assume that the adjustable value from time to time of that or any other * equity or loan interest in the * target entity is its * cost base.
For example, for that purpose the question whether the interest has a pre-shift gain or a pre-shift loss is determined on the basis that the interest ' s adjustable value is its cost base.Reduction or uplift of cost base and reduced cost base 725-240(3)
The * cost base and the * reduced cost base of a * down interest are reduced at the * decrease time to the extent that section 725-250 provides for the * adjustable value of the interest to be reduced. 725-240(4)
The * cost base and the * reduced cost base of an * up interest are uplifted at the * increase time to the extent that section 725-250 provides for the * adjustable value of the interest to be uplifted. 725-240(5)
However, the * cost base or * reduced cost base is uplifted only to the extent that the amount of the uplift is still reflected in the *market value of the interest when a later * CGT event happens to the interest. 725-240(6)
To work out: (a) whether the * cost base or * reduced cost base of the interest is reduced or uplifted; and (b) if so, by how much;
assume that:(c) the adjustable value from time to time of that or any other * equity or loan interest in the * target entity is its cost base or reduced cost base, as appropriate; and (d) if the interest is an * up interest because it was issued at a * discount - the adjustable value of the interest immediately before it was issued was its cost base or reduced cost base, as appropriate, when it was issued.
For example, for that purpose the question whether the interest has a pre-shift gain or a pre-shift loss is determined on the basis that the interest ' s adjustable value is its cost base or reduced cost base, as appropriate.Reductions and uplifts also apply to pre-CGT assets 725-240(7)
A reduction or uplift occurs regardless of whether the entity that owns the interest * acquired it before, on or after 20 September 1985.
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