INCOME TAX ASSESSMENT ACT 1936 - SECT 423 Adjustment of capital proceeds where section 47A applies to rolled - over assets

INCOME TAX ASSESSMENT ACT 1936 - SECT 423

  (1)   For the purposes of applying this Act in calculating the attributable income of the eligible CFC, in relation to the eligible period in relation to the eligible taxpayer, the following provision has effect.

  (2)   The capital proceeds from a CGT event that happens in relation to a CGT asset of the eligible CFC during the eligible period are reduced if:

  (a)   either:

  (i)   because of Division   17 of former Part   IIIA of this Act, that Part   did not apply to the disposal of the asset to the eligible CFC by another CFC during the eligible period or an earlier statutory accounting period; or

  (ii)   there was a roll - over under Division   122, 124 or 126 of the Income Tax Assessment Act 1997 (except under Subdivision   124 - J, 124 - K or 124 - L of that Act) for a CGT event (the earlier CGT event ) that happened during that period in relation to the asset and involving the eligible CFC and another CFC; and

  (b)   the eligible taxpayer was an attributable taxpayer in relation to both CFC's at the time of the disposal or the earlier CGT event; and

  (c)   the other CFC is taken, under section   47A of this Act, to have paid the eligible CFC a dividend in relation to the disposal or the earlier CGT event; and

  (d)   an amount is included in the attributable taxpayer's assessable income in respect of the dividend under section   456 of this Act.

  (3)   The reduction is the lesser of:

  (a)   the amount of the dividend; and

  (b)   the amount of any capital gain that:

  (i)   apart from Division   17 of former Part   IIIA of this Act, would have accrued to the other CFC in respect of the disposal if the consideration in respect of the disposal had been the market value of the asset at the time of the disposal; or

  (ii)   the other CFC would have made from the earlier CGT event apart from the roll - over if the capital proceeds from that event had been the market value of the asset at the time of that event.