Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 725.45

  (1)   The main object of this Division is:

  (a)   to prevent inappropriate losses from arising on the realisation of * equity or loan interests from which value has been shifted to other equity or loan interests in the same entity; and

  (b)   to prevent inappropriate gains from arising on the realisation of equity or loan interests in the same entity to which the value has been shifted;

so far as those interests are owned by entities involved in the value shift.

  (2)   This is done by:

  (a)   adjusting the value of those interests for income tax purposes to take account of changes in * market value that are attributable to the value shift; and

  (b)   treating the value shift as a partial realisation to the extent that value is shifted:

  (i)   between interests held by different owners; or

  (ii)   in the case of interests in their character as CGT assets--from post - CGT assets to pre - CGT assets; or

  (iii)   between interests of different characters.