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INCOME TAX ASSESSMENT ACT 1997 - SECT 855.32

Disregard market value of duplicated non - TARP assets

  (1)   The purpose of this section is to prevent double counting of the * market value of the assets of a corporate group that:

  (a)   are not * taxable Australian real property; and

  (b)   are created under * arrangements under which corresponding liabilities are created in other members of the group.

  (2)   For the purposes of subsections   855 - 30(2) and (4), subsection   (4) of this section applies to an asset that is not * taxable Australian real property if:

  (a)   the parties to an * arrangement included the 2 entities referred to in subsection   (3); and

  (b)   an effect of the arrangement was to create, before the * CGT event happened:

  (i)   the asset as an asset of one of those 2 parties; and

  (ii)   a corresponding liability of the other (the other party ).

  (3)   The 2 entities are either:

  (a)   the first entity and the other entity (see subsection   855 - 30(3)), if table item   2 in subsection   855 - 30(4) applies to those entities; or

  (b)   both:

  (i)   that first entity or that other entity; and

  (ii)   an entity that is a first entity or other entity for the purposes of a related application of subsection   855 - 30(3) and table item   2 in subsection   855 - 30(4).

  (4)   Disregard:

  (a)   if the other party is the test entity (see subsection   855 - 30(2))--the asset's * market value; or

  (b)   otherwise--the percentage of the asset's market value equal to the percentage that is the test entity's * total participation interest in the other party.

Example:   The test entity loans money to its wholly - owned subsidiary. The market value of the loan asset created as an asset of the test entity is disregarded for the purposes of subsection   855 - 30(2).


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