New Business Tax System (Debt and Equity) Act 2001 (163 of 2001)

Schedule 1   Debt and equity interests

Part 1   Amendment of the Income Tax Assessment Act 1997

Income Tax Assessment Act 1997

23   After subsection 130-40(6)

Insert:

(6A) An amount is to be added under this subsection if a *capital gain made from the right has been reduced under section 118-20. This is so even though a capital gain that is made on exercise is disregarded under subsection (7). The amount to be added is the amount of the reduction.

Note: For example, a capital gain made on the exercise of the right under section 118-20 may be reduced because an amount is included in the owner's assessable income under subsection 26BB(2) of the Income Tax Assessment Act 1936 (about assessing a gain on disposal or redemption of a traditional security) or section 159GS of that Act (about balancing adjustments on transfer of a qualifying security).