Commonwealth Numbered Acts

TAXATION LAWS AMENDMENT ACT (No. 5) 1992 No. 224 of 1992 - SECT 19

19. Section 70B of the Principal Act is amended by adding at the end the
following subsections:

"(4) If:

   (a)  a taxpayer disposes of a traditional security or a traditional
        security of a taxpayer is redeemed; and

   (b)  there is a loss on the disposal or redemption; and

   (c)  in the case of a disposal or redemption of a marketable security:

        (i)    the taxpayer did not acquire the security in the ordinary
               course of trading on a securities market; and

        (ii)   at the time the taxpayer acquired the security, it was not open
               to the taxpayer to acquire an identical security in the
               ordinary course of trading on a securities market; and

   (d)  in the case of a disposal of a marketable security - the disposal did
        not take place in the ordinary course of trading on a securities
        market; and

   (e)  having regard to:

        (i)    the financial position of the issuer of the security; and

        (ii)   perceptions of the financial position of the issuer of the
               security; and

        (iii)  other relevant matters; it would be concluded that the disposal
               or redemption took place for the reason, or for reasons that
               included the reason, that there was an apprehension or belief
               that the issuer was, or would be likely to be, unable or
               unwilling to discharge all liability to pay amounts under the
               security; a deduction is not allowable to the taxpayer under
               this section in respect of so much of the amount of the loss as
               is a loss of capital or a loss of a capital nature.

"(5) A reference in this section to the disposal by a taxpayer of a security,
or to the redemption of a security of a taxpayer, does not include a reference
to the waiver or release by the taxpayer of:

   (a)  the whole or a part of the debt the subject of the security; or

   (b)  any other right of the taxpayer under the security.

"(6) Subsection (5) does not, by implication, affect the meaning of an
expression used in:

   (a)  a provision of this Act other than this section; or

   (b)  any other law of the Commonwealth.

"(7) In this section:
'issuer', in relation to a security at a particular time, means the person
who, if the amount or amounts payable under the security were due and payable
at that time, would be liable to pay the amount or amounts;
'marketable security' means a traditional security that is covered by
paragraph (a) of the definition of 'security' in subsection 159GP(1);
'securities market' means a market, exchange or other place at which, or a
facility by means of which, offers to sell, purchase or exchange marketable
securities are regularly made or accepted.".