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Edited version of private advice
Authorisation Number: 1051934563364
Date of advice: 22 December 2021
Ruling
Subject: Earnout arrangements
Question 1
The application of Subdivision 118-I of the Income Tax Assessment Act 1997 (ITAA 1997) to the component of the Contingency Payment that relates to the pre-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 2
Application of subsection 116-120(1)(a) of the ITAA 1997 to the value of the Contingency Payment allocable to the pre-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 3
Application of subsection 116-120(1)(b) of the ITAA 1997 and subsection 116-120(3) of the ITAA 1997 with regards to the component of the Contingency Payment allocable to the pre-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 4
Application of section 230-505 of the ITAA 1997 and section 40-285 of the ITAA 1997 in relation to the component of the Contingency Payment allocable to the post-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 5
Application of Division 230 of the ITAA 1997 to the difference between the cost of the Contingency and the proceeds received from the Contingency in relation to the post-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 6
Application of Subdivision 118-I of the ITAA 1997 to the Upside Payment.
Answer
The Commissioner has ruled on this question.
Question 7
Application of section 230-505 of the ITAA 1997 to the Upside Payment in relation to the pre-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 8
Application of Division 230 of the ITAA 1997 to the difference between the cost of the Upside Payment and the proceeds received from the Upside Payment in relation to the pre-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 9
Application of section 230-505 of the ITAA 1997 to the difference between the cost of the Upside Payment and the proceeds received from the Upside Payment in relation to the post-UCA assets.
Answer
The Commissioner has ruled on this question.
Question 10
Application of Division 230 of the ITAA 1997 to the difference between the cost of the Upside Sharing Payment and the proceeds from the Upside Payment in relation to the post-UCA assets.
Answer
The Commissioner has ruled on this question.