Income Tax Assessment Act 1936

PART III - LIABILITY TO TAXATION  

Division 1 - General  

SECTION 23K   SUBSTITUTION OF CERTAIN SECURITIES  

23K(1)   [ Definitions]  

In this section:

central borrowing authority
means:

(a) the New South Wales Treasury Corporation;

(b) the Victorian Public Authorities Finance Agency;

(c) the Victoria Transport Borrowing Agency;

(d) the Queensland Government Development Authority;

(e) the Treasurer of the State of Western Australia;

(f) the South Australian Government Financing Authority;

(g) the Local Government Finance Authority of South Australia;

(h) any other public authority of a State, being a public authority that is empowered to issue securities in the manner referred to in paragraph (2)(a).

public authority
includes a Minister of the Crown in right of a State, a municipal corporation and any other local government body.

security
means stock, a bond or debenture, or any other document evidencing the indebtedness of a person, whether or not the debt is secured.

23K(2)   [ Issue of substituted security]  

For the purposes of this section, a person shall be taken to have issued a security (in this subsection referred to as the substituted security ) to a taxpayer in substitution for another security (in this subsection referred to as the original security ) held by the taxpayer if and only if:

(a) the substituted security was issued by the person to the taxpayer in exchange for the surrender or transfer of, or otherwise in replacement or substitution for, the original security; and

(b) the terms and conditions provided for by the substituted security were identical in all material respects to those provided for by the original security.

23K(3)   [ No issue of substituted security]  

Where:

(a) but for this subsection, a person would be taken to have issued a security (in this subsection referred to as the substituted security ) to a taxpayer in substitution for another security (in this subsection referred to as the original security ) held by the taxpayer; and

(b) either or both of the following conditions is or are satisfied:

(i) an amount was payable by the taxpayer by way of consideration for the issue of the substituted security; or

(ii) an amount was payable to the taxpayer by way of consideration for the surrender, transfer, replacement or substitution of the original security;

the person shall not be taken for the purposes of this section to have issued the substituted security in substitution for the original security.

23K(4)   [ Where day interest payable different]  

Where:

(a) under terms and conditions provided for by a security, the day on which interest is payable in respect of a period is different from that on which interest is payable in respect of the same period under another security; and

(b) the terms and conditions provided for by the securities are otherwise identical in all material respects;

the following provisions have effect:

(c) if the days on which the interest is payable are separated by an interval not exceeding 31 days - the terms and conditions provided for by the 2 securities shall, for the purposes of paragraph (2)(b), be taken to be identical in all material respects; and

(d) in any other case - the terms and conditions provided for by the 2 securities shall, for the purposes of paragraph (2)(b), be taken not to be identical in all material respects.

23K(5)   [ Security issued on or after 8 August 1984]  

Where, on or after 8 August 1984, a central borrowing authority issued or issues a security (in this subsection referred to as the substituted security ) to a taxpayer in substitution for another security (in this subsection referred to as the original security ) held by the taxpayer that was issued by a public authority other than the central borrowing authority:

(a) the substituted security shall, for the purposes of this Act, be deemed to be a continuation of the original security on the terms and conditions provided for by the substituted security; and

(b) no amount shall, in respect of the issue of the substituted security or the surrender, transfer, replacement or substitution of the original security, be included in, allowable as a deduction from or taken into account in ascertaining any amount included in or allowable as a deduction from, the assessable income of any taxpayer in respect of any year of income.