Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS

View history note

Division 124 - Replacement-asset roll-overs

View history note

Subdivision 124-M - Scrip for scrip roll-over

View history reference

View history note

Operative provisions

SECTION 124-784C Cost base of equity or debt given within acquiring group

View history reference

Purpose

124-784C(1)
This section allocates an appropriate *cost base to equity issued, or new debt owed, under the *arrangement by a member of a *wholly-owned group to another member (the holder ) of the group, if:

(a) an acquiring entity is a member of the group; and

(b) the cost base of the acquiring entity for a qualifying interest was worked out under section 124-784B .

Allocation of cost base

124-784C(2)
The first element of the *cost base of the equity or debt for the holder is that part of the cost base of the qualifying interest worked out under section 124-784B as:

(a) may be reasonably allocated to the equity or debt; and

(b) is not more than the *market value of the equity or debt at the completion time.

View history note

History

S 124-784C substituted by No 135 of 2015, s 3 and Sch 1 item 11, applicable in relation to CGT events happening after 7:30 pm, by legal time in the Australian Capital Territory, on 8 May 2012. S 124-784C formerly read:

SECTION 124-784C Cost base of equity or debt given by acquiring entity to ultimate holding company
Purpose

124-784C(1)
This section allocates an appropriate *cost base to equity issued, or new debt owed, by an acquiring entity under the *arrangement to the *ultimate holding company of a *wholly-owned group where the cost base of the acquiring entity for a qualifying interest was worked out under section 124-784B .

Allocation of cost base

124-784C(2)
The first element of the *cost base of the equity or debt for the *ultimate holding company is that part of the cost base of the qualifying interest worked out under section 124-784B as:

(a) may be reasonably allocated to the equity or debt; and

(b) is not more than the *market value of the equity or debt at the completion time.

No capital gain on debt repayment

124-784C(3)
Any *capital gain of the *ultimate holding company from the repayment of new debt owed by an acquiring entity under the *arrangement is disregarded to the extent that it relates to the difference between the part of the *cost base worked out under section 124-784B and the *market value of the debt at the completion time.
Note:

If the debt is assigned or exchanged, there may be a capital gain.

S 124-784C inserted by No 14 of 2009, s 3 and Sch 1 item 2, effective 26 March 2009. For application provision, see note under s 112-53 .

Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.