INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17 - Miscellaneous roll-over relief  

SECTION 160ZZPAB   OPTIONS AND RIGHTS TO ACQUIRE UNISSUED SHARES AFFECTED BY SHARE SPLITS OR SHARE CONSOLIDATIONS  

160ZZPAB(1)   [Application of section]  

This section applies where:

(a) a taxpayer owns:

(i) rights (in this section called the ``original rights'' ) issued by a company to acquire shares (in this section called the ``original shares'' ) in the company or to acquire an option to acquire shares (in this section also called the ``original shares'' ) in the company; or

(ii) an option (in this section called the ``original option'' ) to acquire shares (in this section also called the ``original shares'' ) in the company;

(b) either of the following conditions is satisfied in relation to the original shares:

(i) the original shares are consolidated and divided into shares (in this section called the ``new shares'' ) of larger amount;

(ii) the original shares are subdivided into shares (in this section also called the ``new shares'' ) of smaller amount;

(c) after 28 January 1988, and as a consequence of the consolidation or subdivision:

(i) the original rights are cancelled; or

(ii) the original option is cancelled;

as the case may be;

(d) the taxpayer is a resident of Australia or the cancellation constituted a disposal of a taxable Australian asset;

(e) the company issues to the taxpayer:

(i) other rights (in this section called the ``new rights'' ) relating to the new shares, in substitution for the original rights; or

(ii) another option (in this section called the ``new option'' ) relating to the new shares, in substitution for the original option;

(f) the market value of the new rights or the new option immediately after it was or they were issued is not less than the market value of the original rights or the original option immediately before the cancellation;

(g) the taxpayer did not receive any consideration other than the new rights or the new option in respect of the cancellation; and

(h) the taxpayer has elected that this section is to apply in respect of the cancellation of the original rights or the original option.

160ZZPAB(2)   [Application of Pt IIIA]  

This Part (other than this section) does not apply in respect of the cancellation and:

(a) if the original rights or the original option was or were acquired by the taxpayer before 20 September 1985 - the taxpayer shall be taken to have acquired the new rights or the new option before that date; or

(b) if the original rights or the original option was or were acquired by the taxpayer on or after 20 September 1985 - the taxpayer shall be taken to have paid as consideration in respect of the acquisition of the new rights or the new option an amount equal to:

(i) for the purpose of ascertaining whether a capital gain accrued to the taxpayer in the event of the subsequent disposal by the taxpayer of:

(A) the new rights;

(B) the new option; or

(C) the shares or option to which the new rights or the new option relates;

the amount that would have been the indexed cost base to the taxpayer of the original rights or the original option for the purposes of this Part if this Part had applied in respect of the cancellation of the original rights or the original option; or

(ii) for the purposes of ascertaining whether the taxpayer incurred a capital loss in the event of the subsequent disposal by the taxpayer of:

(A) the new rights;

(B) the new option; or

(C) the shares or option to which the new rights or the new option relates;

the amount that would have been the reduced cost base to the taxpayer of the original rights or the original option for the purposes of this Part if this Part had applied in respect of the cancellation of the original rights or the original option.

160ZZPAB(3)   [Disposal by taxpayer within 12 months of new rights or new option or related shares or option]  

If, in a case to which paragraph (2)(b) applies:

(a) the new rights or the new option was or were disposed of by the taxpayer within 12 months after the day on which the original rights or the original option was or were acquired by the taxpayer; or

(b) the shares or option to which the new rights or the new option relates was or were disposed of by the taxpayer within 12 months after the day on which the shares or the option was or were acquired by the taxpayer;

the reference in that paragraph to the indexed cost base to the taxpayer of the original rights or the original option shall be read as a reference to the cost base to the taxpayer of the original rights or the original option.

160ZZPAB(4)   [Election]  

An election by a taxpayer under subsection (1) shall be made by notice in writing given to the Commissioner on or before the date of lodgment of the return of income of the taxpayer for the year of income in which the cancellation concerned took place, or within such further period as the Commissioner allows.