INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 19A - Transfers of assets between companies under common ownership  

Subdivision E - Other assets  

SECTION 160ZZRF   FIRST ASSET ACQUIRED BEFORE TRANSFEROR AND TRANSFEREE CAME UNDER COMMON OWNERSHIP - SHARES IN, AND LOANS TO, TRANSFEROR - REDUCTION IN COST BASE ETC.  

160ZZRF(1)   [Application of section]  

This section applies where the transferor acquired the first asset before the latest time (in this section called the ``common ownership time'' ):

(a) earlier than the first asset disposal time, and

(b) at which the transferor and the transferee came under common ownership.

160ZZRF(2)   [Where asset acquired on or after 20 September 1985]  

If:

(aa) the first asset was acquired by the transferor on or after 20 September 1985 (otherwise than because of section 160ZZS ); and

(a) at the first asset disposal time, a taxpayer (in this subsection called the ``second taxpayer'' ) held an asset, being:

(i) a share in the transferor that was acquired by the second taxpayer on or after 20 September 1985; or

(ii) a loan to the transferor that was acquired by the second taxpayer on or after 20 September 1985; and

(b) at the common ownership time, the market value of the assets of the transferor substantially exceeded the total indexed cost bases to the transferor of those assets;

the cost base, the indexed cost base or the reduced cost base of the share or the loan to the second taxpayer is reduced by such amount (if any) as is reasonable.

160ZZRF(3)   [Asset acquired before 20 September 1985 or deemed acquired on or after 20 September 1985]  

If:

(a) either of the following conditions is satisfied:

(i) the first asset was acquired by the transferor before 20 September 1985;

(ii) the first asset was acquired by the transferor on or after 20 September 1985 because of section 160ZZS ; and

(b) at the first asset disposal time, a taxpayer (in this subsection called the ``second taxpayer'' ) held an asset, being:

(i) a share in the transferor that was acquired by the second taxpayer on or after 20 September 1985; or

(ii) a loan to the transferor that was acquired by the second taxpayer on or after 20 September 1985;

the cost base, the indexed cost base or the reduced cost base of the share or the loan to the second taxpayer is reduced by such amount (if any) as is reasonable.

160ZZRF(4)   [Matters to determine what amount is reasonable]  

The second taxpayer must choose whether to use the matters set out in subsection (5) or the matters set out in subsection (6) to determine what amount is reasonable.

160ZZRF(5)   [Circumstances in acquisition; market value; consideration]  

The matters in this subsection are:

(a) the circumstances in which the share or the loan was acquired by the second taxpayer; and

(b) the extent (if any) to which the market value of the share or the loan was reduced as a result of the disposal of the first asset at the first asset disposal time; and

(c) the extent (if any) to which any consideration paid or given by the second taxpayer for the acquisition of the share or the loan was attributable to the first asset.

160ZZRF(6)   [Indexed common ownership market value; consideration]  

The matters in this subsection are:

(a) the indexed common ownership market value of the first asset (see section 160ZZRBB ); and

(b) the amount of the consideration for the disposal of the first asset to the transferee.