Income Tax Assessment Act 1997

Under the adjustable value method:

• the adjustable values of affected interests in the losing entity are reduced; and

• the adjustable values of affected interests in the gaining entity are uplifted, within limits worked out by references to the reductions in the adjustable values of affected interests in the losing entity.

The consequences of that are:

• the cost base and reduced cost base of the interests are reduced or uplifted (or both); and

• if the interests are also trading stock or revenue assets, there are further consequences for them in their character as such.