Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 725.45

Main object

             (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.



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