INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 17 - Miscellaneous roll-over relief  

SECTION 160ZZP   EXCHANGE OF SHARES IN THE SAME COMPANY  

160ZZP(1)   [Application of section]  

Where:

(a) a company redeems or cancels all the shares of a particular class in the company;

(b) a taxpayer holds shares of that class in the company (in this section referred to as the ``original shares'' );

(c) the taxpayer is a resident of Australia or the redemption or cancellation constitutes a disposal of a taxable Australian asset;

(d) the company issues to the taxpayer other shares in the company (in this section referred to as the ``new shares'' ) in substitution for the original shares;

(e) the market value of the new shares immediately after they were issued is not less than the market value of the original shares immediately before the redemption or cancellation;

(f) the taxpayer did not receive any consideration other than the new shares by reason of the redemption or cancellation;

(fa) the total paid-up share capital of the company immediately after the new shares were issued equals the total paid-up share capital of the company immediately before the redemption or cancellation; and

(g) the taxpayer has, by notice in writing given to the Commissioner on or before the date of lodgment of the return of income of the taxpayer for the year of income in which the disposal took place, or within such further period as the Commissioner allows, elected that this section is to apply in respect of the redemption or cancellation;

this Part (other than this section) does not apply in respect of the redemption or cancellation and:

(h) if the original shares were acquired by the taxpayer before 20 September 1985 - the taxpayer shall be deemed to have acquired the new shares before that date; or

(j) if the original shares were acquired by the taxpayer on or after 20 September 1985, the taxpayer shall be deemed to have paid as consideration in respect of the acquisition of the new shares an amount equal to:

(i) for the purpose of ascertaining whether a capital gain accrued to the taxpayer in the event of a subsequent disposal of the new shares by the taxpayer - the amount that would have been the indexed cost base to the taxpayer of the original shares for the purposes of this Part if this Part had applied in respect of the disposal of the original shares by the taxpayer; or

(ii) for the purpose of ascertaining whether the taxpayer incurred a capital loss in the event of a subsequent disposal of the new shares by the taxpayer - the amount that would have been the reduced cost base to the taxpayer of the original shares for the purposes of this Part if this Part had applied in respect of the disposal of the original shares by the taxpayer.

160ZZP(2)   [Disposal of new shares within 12 months of acquisition of original shares]  

If, in a case to which paragraph (1)(j) applies, the new shares were disposed of by the taxpayer within 12 months after the day on which the original shares were acquired by the taxpayer, the reference in that paragraph to the indexed cost base to the taxpayer of the original shares shall be construed as a reference to the cost base to the taxpayer of the original shares.