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Edited version of private advice
Authorisation Number: 1051525961483
Date of advice: 4 June 2019
Ruling
Subject: Cost base of shares after non-scrip capital contribution
Question 1
Will section 110-25 of the Income Tax Assessment Act 1997 apply to the amounts contributed by the taxpayer company to subsidiary company, by way of non-scrip capital contributions, such that the amounts contributed, will be included in the cost base of the ordinary shares held?
Answer
Yes
Relevant facts and circumstances
A taxpayer company applied for a ruling in respect of the application of section 110-25 of the Income Tax Assessment Act 1997. The taxpayer company owns 100% of the issued capital in an offshore subsidiary company. The taxpayer company will contribute funds to the subsidiary by way of non-scrip share capital contributions.