Income Tax Assessment Act 1936

PART X - ATTRIBUTION OF INCOME IN RESPECT OF CONTROLLED FOREIGN COMPANIES  

Division 7 - Calculation of attributable income of CFC  

Subdivision C - Modifications relating to Australian capital gains tax  

SECTION 413   ADJUSTMENT OF COST BASE AS AT COMMENCING DAY - RETURN OF CAPITAL  

413(1)    
For the purposes of applying this Act in calculating the attributable income of the eligible CFC, the following provisions have effect.

413(2)    

Where:

(a) commencing day assets of the eligible CFC consist of shares in a company; and

(b) at any time during the period commencing at the time when the eligible CFC acquired the shares and ending at the end of the eligible CFC's commencing day, the company paid an amount that was not a dividend to the eligible CFC in respect of the shares;

the cost base to the eligible CFC of the shares as at the eligible CFC's commencing day is to be reduced by that amount.

413(3)    

Where:

(a) a commencing day asset of the eligible CFC consists of an interest or unit in a trust; and

(b) at any time during the period commencing at the time when the eligible CFC acquired the interest or unit and ending at the end of the eligible CFC's commencing day, the trustee of the trust paid an amount to the eligible CFC in respect of the interest or unit, being an amount that would not have been notional assessable income of the eligible CFC;

the cost base to the eligible CFC of the interest or unit as at the eligible CFC's commencing day is to be reduced by so much of the amount as is not attributable to a deduction allowed under Division 43 of the Income Tax Assessment Act 1997 or former Division 10C or 10D of Part III of this Act.

413(4)    
The payment referred to in subsection (2) or (3) can include giving property: see subsection 405(3) .