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INCOME TAX ASSESSMENT ACT 1997 - SECT 320.200

Consequences of transfer of assets to or from complying superannuation asset pool

             (1)  This section applies if:

                     (a)  an asset (other than money) is transferred from a * complying superannuation asset pool under subsection 320-180(1) or 320-195(2) or (3); or

                     (b)  an asset (other than money) is transferred to a complying superannuation asset pool under subsection 320-180(3) or section 320-185.

             (2)  In determining:

                     (a)  for the purposes of this Act (other than Parts 3-1 and 3-3) whether an amount is included in, or can be deducted from, the assessable income of a * life insurance company in respect of the transfer of the asset; or

                     (b)  for the purposes of Parts 3-1 and 3-3:

                              (i)  whether the company made a * capital gain in respect of the transfer of the asset; or

                             (ii)  whether the company made a * capital loss in respect of the transfer of the asset;

the company is taken:

                     (c)  to have sold, immediately before the transfer, the asset transferred for a consideration equal to its * market value; and

                     (d)  to have purchased the asset again at the time of the transfer for a consideration equal to its market value.

          (2A)  Without limiting subsection (2), where the asset transferred is a * depreciating asset, Division 40 has effect for the company as if:

                     (a)  in relation to the sale of the asset that is taken to have occurred under paragraph (2)(c):

                              (i)  the sale were a * balancing adjustment event; and

                             (ii)  the * termination value of the asset for that event were equal to the consideration for the sale under that paragraph; and

                            (iii)  the company had stopped * holding the asset at the time of the sale; and

                     (b)  in relation to the purchase of the asset that is taken to have occurred under paragraph (2)(d):

                              (i)  the company had only begun to hold the asset after the purchase; and

                             (ii)  the first element of the asset's * cost were equal to the consideration for the purchase under that paragraph; and

                            (iii)  the company had acquired the asset from an * associate of the company.

Note:          This means that, amongst other things, as a result of the transfer:

*       the asset's cost for the purposes of working out a deduction under Division 40 is reset; and

*       the company's assessable income might be adjusted under section 40- 285.

             (3)  If, apart from this subsection and section 320- 55, a * life insurance company could deduct an amount or make a * capital loss as a result of a transfer of an asset to or from its * complying superannuation asset pool, the deduction or capital loss is disregarded until:

                     (a)  the asset ceases to exist; or

                     (b)  the asset, or a greater than 50% interest in it, is * acquired by an entity other than an entity that is an * associate of the company immediately after the transfer.

             (4)  Subsection (3) does not apply in relation to an amount that the company can deduct under a provision in Division 40.

Guide to Subdivision 320-H



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