Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 16E - Accruals assessability, etc., in respect of certain security payments  

SECTION 159GZ   STRIPPED SECURITIES  

159GZ(1)   [Transfer of payment rights re underlying securities]  

Where:

(a) at any time a taxpayer acquires or acquired a security (in this subsection referred to as the ``underlying security'' ) in relation to which there are or were 2 or more payment rights; and

(b) the taxpayer transfers or transferred one or some but not all of those rights to a particular person or particular persons jointly;

for the purposes of the application of this Division (including any subsequent application of this subsection) in relation to any period after the transfer of the right or rights:

(c) instead of the underlying security, there shall be taken to have been originally issued:

(i) a separate security under which the payment right or payment rights transferred to the person or persons referred to in paragraph (b) were created;

(ii) where at the time at which that right or those rights were transferred, another payment right or other payment rights in relation to the underlying security was or were transferred to another person or to other persons jointly - a separate security under which that other right or those other rights were created; and

(iii) where immediately after the transfer the taxpayer retains or retained any payment right or rights - a separate security under which that right or those rights were created;

(d) where the underlying security was issued to the taxpayer - the issue price of each separate security referred to in paragraph (c) shall be taken to be so much of the issue price of the underlying security as bears to that amount the proportion that the market value of the separate security at the time of issue of the underlying security bears to the market value of the underlying security at that time; and

(e) where the underlying security was acquired by the taxpayer on transfer - the transfer price, in relation to that transfer, of each separate security referred to in paragraph (c) shall be taken to be so much of the transfer price of the underlying security as bears to that amount the proportion that the market value of the separate security at the time of transfer bears to the market value of the underlying security at that time.

159GZ(2)   [Payment rights separate security]  

Where, by reason of the application of subsection (1) in relation to the transfer after 16 December 1984 of a payment right or payment rights in relation to a security to a particular person or particular persons jointly, the payment right or rights is or are taken to comprise a separate security, then, for the purposes of the application of this Division in relation to the separate security in relation to any period after the transfer, paragraph (a) of the definition of ``qualifying security'' in subsection 159GP(1) shall be disregarded.

159GZ(3)   [``payment right'']  

In subsections (1) and (2), ``payment right'' , in relation to a security, means a right to receive a particular payment that is liable to be made under the security.

159GZ(4)   [Amount of deduction allowable]  

Where:

(a) at any time a taxpayer acquires or acquired a security (in this subsection referred to as the ``underlying security'' ) on issue or transfer;

(b) after 16 December 1984, the taxpayer issues a qualifying security (in this subsection referred to as the ``stripped security'' ); and

(c) but for this subsection, a deduction of an amount equal to the whole or a part of the issue price or, where the underlying security was acquired on transfer, the transfer price of the underlying security would be allowable from the assessable income of the taxpayer of the year of income in which the taxpayer issues the stripped security in respect of the issue of the stripped security;

the amount of the deduction allowable shall be an amount that bears to the issue price or transfer price, as the case may be, of the underlying security the same proportion as the market value of the stripped security at the time of issue or purchase, as the case may be, bears to the market value of the underlying security at that time.