New Business Tax System (Consolidation and Other Measures) Act (No. 1) 2002 (117 of 2002)

Schedule 2   Consolidation: group continues when shelf company becomes new head company

Income Tax Assessment Act 1997

7   At the end of Subdivision 124-G

Add:

Additional consequences for member if shares are trading stock or revenue assets

124-390 Deferral of profit or loss on shares

(1) There are additional consequences if:

(a) under subsection 124-360(2), you are taken to obtain the roll-over and, at the time immediately before you*dispose of your*shares in the original company, some or all of them are your*trading stock or*revenue assets; or

(b) under subsection 124-370(1A), you are taken to obtain the roll-over and, at the time immediately before the original company redeems or cancels your shares in it, some or all of them are your trading stock or revenue assets.

Trading stock

(2) The amount included in your assessable income because of the*disposal, redemption or cancellation of each of your*shares in the original company that is your*trading stock at that time is equal to:

(a) if the share has been your trading stock ever since the start of the income year in which that time occurs - the total of:

(i) its*value as trading stock at the start of the income year; and

(ii) the amount (if any) by which its cost has increased since the start of the income year; or

(b) otherwise - its cost at that time.

(3) For each of the*shares in the interposed company that you acquired in return for those of your shares in the original company that were your*trading stock at that time, you are taken to have paid:

Note: The amount worked out under the formula becomes the cost of each of those shares in the interposed company.

Revenue assets

(4) For each of your*shares in the original company that is a*revenue asset at that time, your assessable income includes the total of the amounts that (apart from this subsection) would be subtracted from the gross disposal proceeds in calculating any profit or loss on your disposing of, or ceasing to own, that share at that time.

(5) For each of the*shares in the interposed company that you acquired in return for those of your shares in the original company that were*revenue assets at that time, you are taken to have paid: