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

29   After subsection 130-60(1)

Insert:

(1A) An amount is to be added under this subsection if a *capital gain from the *convertible interest has been reduced under section 118-20. This is so even though a capital gain that is made on conversion is disregarded under subsection (3). The amount to be added is the amount of the reduction.

Note: For example, a capital gain made on the conversion 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).