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INCOME TAX ASSESSMENT ACT 1997 - SECT 165.115GB

When adjustments must be made

             (1)  The operation of this Subdivision is triggered at an alteration time, which is when:

                     (a)  an alteration takes place in the ownership or control of the company; or

                     (b)  a liquidator or administrator of the company declares that shares or financial instruments are worthless (CGT event G3).

             (2)  An alteration time is the trigger for making reductions and other adjustments to the reduced cost base of significant equity and debt interests in the company that are owned by an entity (not an individual) that, alone or with its associates, has a controlling stake in the company and either:

                     (a)  has a * direct equity interest or * indirect equity interest of at least 10% in the company; or

                     (b)  is owed a debt of at least $10,000 by the company or by another entity that has a significant equity or debt interest in the company.

Deductions that relate to such interests held as trading stock or otherwise on revenue account are also reduced.

             (3)  Adjustments may also be made when such an entity's interests in the company are partly realised within 12 months before an alteration time or if, under an arrangement, such interests are realised partly within that period or at the alteration time and partly at an earlier time.

             (4)  However, entities in which there are no interests in respect of which the company's losses have been, or can be, duplicated are not affected by this Subdivision.



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