INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART IIIA - CAPITAL GAINS AND CAPITAL LOSSES  

Division 20A - Special provisions relating to disposals of certain pre-20 September 1985 assets  

SECTION 160ZZT   DISPOSAL OF SHARES OR INTEREST IN TRUST  

160ZZT(1)   [``Underlying property'' acquired on or after 20 September 1985]  

Where:

(a) a taxpayer has, whether before or after the commencement of this Part, disposed of an asset being:

(i) shares in a private company; or

(ii) (Omitted by No 48 of 1991)

(iii) an interest in a private trust estate;

(b) the taxpayer acquired the asset before 20 September 1985;

(c) immediately before the disposal of the asset by the taxpayer:

(i) in a case where the asset disposed of by the taxpayer consisted of shares in a private company or an interest in a private trust estate, the property of the company or trust estate, as the case may be, included property (in this subsection referred to as the ``underlying property'' ) that:

(A) was acquired by the company or trustee of the trust estate, as the case may be, on or after 20 September 1985; and

(B) was not trading stock of the company or trust estate; or

(ii) the company or trustee of the trust estate, as the case may be, held an interest, through one or more interposed companies or trusts, in property (in this subsection also referred to as the ``underlying property'' ) that:

(A) was acquired by another private company or trustee of a private trust estate on or after 20 September 1985; and

(B) was not trading stock of the company or trust estate referred to in sub-subparagraph (A); and

(d) immediately before the disposal of the asset by the taxpayer, the value of:

(i) in a case to which subparagraph (c)(i) applies - the underlying property referred to in that subparagraph; or

(ii) in a case to which subparagraph (c)(ii) applies - the interest referred to in that subparagraph;

was not less than 75% of the net worth of the company or trust estate referred to in paragraph (a),

a capital gain shall be deemed to have accrued to the taxpayer during the year of income in which the taxpayer disposed of the asset equal to so much of the consideration received or receivable by the taxpayer in respect of the disposal as may reasonably be attributed to the amount (if any) by which the value of the underlying property immediately before the disposal exceeds the sum of the amounts that would be the indexed cost bases to the company or trustee referred to in sub-subparagraph (c)(i)(A) or to the company or trustee referred to in sub-subparagraph (c)(ii)(A), as the case requires, of the underlying property if the underlying property had been disposed of immediately before the disposal of the asset.

160ZZT(1A)   [Private company; private trust estate; unlisted company; unlisted unit trust]  

For the purposes of this section:

(a) a company is taken to have been a private company at a particular time (in this paragraph called the ``relevant time'' ) after 19 September 1985 if the company was an unlisted company:

(i) at the relevant time; or

(ii) at any time during:

(A) where the relevant time was later than 15 August 1994 - the period of 5 years immediately preceding the relevant time; or

(B) in any other case - the period that commenced on 15 August 1989 and ended at the relevant time; and

(b) a trust estate is taken to have been a private trust estate at a particular time (in this paragraph called the ``relevant time'' ) after 19 September 1985 if the relevant trust is not a unit trust or, where the relevant trust is a unit trust, if the unit trust was an unlisted unit trust:

(i) at the relevant time; or

(ii) at any time during:

(A) where the relevant time was later than 15 August 1994 - the period of 5 years immediately preceding the relevant time; or

(B) in any other case - the period that commenced on 15 August 1989 and ended at the relevant time; and

(c) a company is taken to have been an unlisted company at a particular time if at that time no shares in the company were listed for quotation in the official list of a stock exchange in Australia or elsewhere; and

(d) a unit trust is taken to have been an unlisted unit trust at a particular time if at that time no units in the unit trust were listed for quotation in the official list of a stock exchange in Australia or elsewhere or were ordinarily available for subscription or purchase by the public.

160ZZT(2)   [Property; net worth; shares purchased; land sold or purchased]  

For the purposes of this section:

(a) a reference to property generally or to a particular kind of property includes a reference to an estate or interest in property, or in that kind of property; and

(b) a reference to the net worth of a company or trust estate is a reference to the total value of the assets of the company or trust estate as reduced by the total liabilities of the company or trust estate; and

(c) if a share is acquired by way of subscription of capital (with or without the payment of any other consideration), it is taken to have been purchased; and

(d) if a company issues shares in itself to a person as, or as part of, the consideration for the sale of property by the person to the company, the person is taken to have purchased those shares; and

(e) if one or more persons (the ``transferors'' ) transfer property, with or without consideration, to one or more other persons (the ``transferees'' ) the transfer is taken to constitute:

(i) the sale of the property by the transferors; and

(ii) the purchase of the property by the transferees; and

(f) if, under a contract, land is sold or purchased, it is taken to be sold or purchased on the day the contract is made.

160ZZT(3)   [Calculation of net worth]  

In calculating the net worth of a company or trust estate for the purposes of this section, the Commissioner shall, if satisfied that liabilities were discharged or released or assets acquired for the purpose, or for purposes that included the purpose, of ensuring that this section would not apply in relation to a taxpayer, disregard the discharge or release of those liabilities or the values of those assets, as the case may be.

160ZZT(4)   [Transferee deemed to acquire asset before 20 September 1985]  

For the purposes of this section, if:

(a) after 15 August 1989, a company (in this subsection called the ``transferor'' ) disposes of an asset to another company (in this subsection called the ``transferee'' ) that is a non-resident; and

(b) the transferor acquired the asset before 20 September 1985; and

(c) the asset is not a taxable Australian asset; and

(d) the transferee is related to the transferor when the disposal takes place;

the transferee is taken to have acquired the asset before 20 September 1985.