Income Tax Assessment Act 1997



Division 855 - Capital gains and foreign residents  

Subdivision 855-A - Disregarding a capital gain or loss by foreign residents  

SECTION 855-32   Disregard market value of duplicated non-TARP assets  

The purpose of this section is to prevent double counting of the *market value of the assets of a corporate group that:

(a) are not *taxable Australian real property; and

(b) are created under *arrangements under which corresponding liabilities are created in other members of the group.

For the purposes of subsections 855-30(2) and (4) , subsection (4) of this section applies to an asset that is not *taxable Australian real property if:

(a) the parties to an *arrangement included the 2 entities referred to in subsection (3); and

(b) an effect of the arrangement was to create, before the *CGT event happened:

(i) the asset as an asset of one of those 2 parties; and

(ii) a corresponding liability of the other (the other party ).

The 2 entities are either:

(a) the first entity and the other entity (see subsection 855-30(3) ), if table item 2 in subsection 855-30(4) applies to those entities; or

(b) both:

(i) that first entity or that other entity; and

(ii) an entity that is a first entity or other entity for the purposes of a related application of subsection 855-30(3) and table item 2 in subsection 855-30(4) .


(a) if the other party is the test entity (see subsection 855-30(2) ) - the asset ' s *market value; or

(b) otherwise - the percentage of the asset ' s market value equal to the percentage that is the test entity ' s *total participation interest in the other party.


The test entity loans money to its wholly-owned subsidiary. The market value of the loan asset created as an asset of the test entity is disregarded for the purposes of subsection 855-30(2) .


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