Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 230.505

  (1)   This section applies if you start or cease to have a * Division   230 financial arrangement as consideration for the provision or acquisition of a thing.

  (2)   Work out the * market value of the thing at the time at which you (in fact) provide or acquire it. For the purposes of applying this Act to you, treat the amount:

  (a)   you obtain for providing the thing; or

  (b)   you provide for acquiring the thing;

as being that market value.

Note 1:   The amount may be relevant, for example, for the purposes of applying the provisions of this Act dealing with capital gains, capital allowances or trading stock to the thing.

Note 2:   This subsection does not affect the financial benefits received or provided under the financial arrangement from you starting or ceasing to have it (except in the circumstances described in Note 3). However:

(a)   the market value of the thing will be, or form part of, those financial benefits for the purposes of section   230 - 445; and

(b)   in the case of a non arm's length transaction, the amount of those financial benefits may be affected by section   230 - 510.

Note 3:   If the thing is itself a Division   230 financial arrangement and subsection   (3) does not apply, this subsection will determine the financial benefits received or provided under the financial arrangement from you starting or ceasing to have it.

  (3)   Subsection   (2) does not apply if:

  (a)   you start or cease to have the * financial arrangement as mentioned in subsection   (1) under an arrangement (the starting or ceasing arrangement ); and

  (b)   the thing is itself a * Division   230 financial arrangement; and

  (c)   the starting or ceasing arrangement is not itself a Division   230 financial arrangement.

Example:   An arrangement for exchanging a share subject to Subdivision   230 - C for another share subject to Subdivision   230 - C, where the arrangement itself is not a Division   230 financial arrangement.

  (4)   For the purposes of this section:

  (a)   treat yourself as providing a thing to another entity if:

  (i)   you have provided, or are to provide, the thing to the other entity; or

  (ii)   you cease to have, have ceased to have or are to cease to have, the thing; or

  (iii)   the other entity starts to have, has started having or is to start to have, the thing; and

  (b)   treat yourself as acquiring a thing if:

  (i)   another entity has provided, or is to provide, the thing to you; or

  (ii)   another entity ceases to have, has ceased to have or is to cease to have, the thing; or

  (iii)   you start to have, have started to have or are to start to have, the thing.

  (5)   For the purposes of this section, treat part of a * Division   230 financial arrangement as a Division   230 financial arrangement.

  (6)   Without limiting subsection   (1), the thing provided, or the thing acquired, need not be a tangible thing and may take the form of services, conferring a right, incurring an obligation or extinguishing or varying a right or obligation.

  (7)   To avoid doubt, this section applies even if your starting or ceasing to have the * financial arrangement mentioned in subsection   (1) is only part of the consideration for the provision or acquisition of the thing.

  (8)   For the purposes of this section, treat your starting or ceasing to have the * financial arrangement mentioned in subsection   (1) as consideration for the provision or acquisition of the thing if that starting or ceasing is, in substance or effect, done for the provision or acquisition of the thing.

Example:   Starting to have a financial arrangement in satisfaction of an obligation, where the obligation itself was incurred as consideration for the thing.