Tax Laws Amendment (2012 Measures No. 2) Act 2012 (99 of 2012)

Schedule 3  

Part 2   Interim rules

Income Tax Assessment Act 1997

22   After section 705-56

Insert:

705-56A Modification for tax cost setting in relation to certain rights to future income

(1) This section applies if, just before the joining time:

(a) the joining entity *holds an asset; and

(b) under the terms of a contract or agreement, the joining entity holds a *right to future income arising from the asset; and

(c) the right to future income is not a *non-deductible right to future income in relation to the joining entity.

(2) Subsection (3) applies if the sum of:

(a) the *market value of the asset at the joining time (having regard to the *right to future income); and

(b) the market value of the right to future income at the joining time;

exceeds the market value of the asset at the joining time (disregarding the right to future income).

(3) For the purposes of paragraph 705-35(1)(c), treat the *market value of the *right to future income as the excess mentioned in subsection (2).

(4) If subsection (3) does not apply:

(a) the *right to future income is not taken into account under paragraph 705-35(1)(b) or (c); and

(b) the right to future income’s *tax cost setting amount is taken to be nil.