INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 12B - Convertible notes that are traditional securities  

SECTION 160ZZBE   CONVERSION OF NOTES INTO SHARES  

160ZZBE(1)   [``convertible note'']  

In this section:

"convertible note"
means a convertible note within the meaning of Division 12 that is a traditional security within the meaning of section 26BB .

160ZZBE(2)   [Note acquired after 10 May 1989]  

A taxpayer who acquired shares by the conversion of a convertible note acquired after 10 May 1989 and on or before 15 August 1989 is taken, for the purposes of this Part, to have paid as consideration in respect of the acquisition of the shares an amount equal to:

(a) if the market value of the shares at the time of the conversion is not less than the sum of the consideration paid or given for the acquisition of the convertible note and the amount paid by the taxpayer in respect of the conversion - that market value; or

(b) if the market value of the shares at the time of the conversion is less than that sum - the consideration that would be deemed to have been paid or given in respect of the acquisition of the shares under section 160ZZA if Division 12 had applied in relation to the convertible note.

160ZZBE(3)   [Note acquired after 15 August 1989]  

A taxpayer who acquired shares by the conversion of a convertible note acquired after 15 August 1989 is taken, for the purposes of this Part, to have paid as consideration in respect of the acquisition of the shares an amount equal to the market value of the shares at the time of the conversion.