INCOME TAX ASSESSMENT ACT 1936 - SECT 440 Asset disposals--revaluations and arm's length amounts
INCOME TAX ASSESSMENT ACT 1936 - SECT 440
Asset disposals--revaluations and arm's length amountsIn determining, for the purposes of this Part, whether a company passes the active income test, the following provisions apply in relation to an asset of the company (other than trading stock):
(a) the effect of an asset revaluation is to be disregarded;
(b) subject to section 438, if:
(i) any consideration paid or payable by the company in respect of the acquisition of the asset; or
(ii) any consideration paid or payable to the company in respect of the disposal of the asset; or
(iii) any expenditure incurred by the company in making capital improvements to the asset; or
(iv) any other amount payable to or by the company that is relevant to determining the revenue, gains or losses concerned;
is not equal to the amount (in this paragraph called the
arm's length amount ) that the parties to the transaction concerned could
have been reasonably expected to have paid if the parties had been acting at
arm's length in relation to the transaction--the amount of the
consideration or expenditure is to be taken to be equal to the arm's
length amount.