INCOME TAX ASSESSMENT ACT 1997
|CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION
|PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE
Div 40 substituted for Divs 40, 41 and 42 by No 76 of 2001.
Subdiv 40-D inserted by No 76 of 2001.
Effect of receiving interest realignment adjustment on assessable income
If you receive an *interest realignment adjustment in an income year, include in your assessable income for the year an amount (the adjustment amount) equal to:
(a) the amount of the adjustment; or
(b) if the adjustment is not an amount - the *market value of the adjustment.
Effect of providing interest realignment adjustment on cost, or cost base and reduced cost base
If an *interest realignment adjustment is provided by you or on your behalf:
(a) include the adjustment amount in the second element of the *cost of a *mining, quarrying or prospecting right that you acquired under the *interest realignment arrangement to which the adjustment amount relates; or
(b) if this Division does not apply to that right - include the adjustment amount in the *cost base and *reduced cost base of that right.
However, if you acquired more than one such right under the arrangement, apportion the adjustment amount between the costs, or cost bases and reduced cost bases, of those rights on a reasonable basis.
Subsections 40-77(1D) and (1E) of the Income Tax (Transitional Provisions) Act 1997 set out when this Division does not apply to the right.
Tax effects of the right to an interest realignment adjustment
In calculating the *termination value of a *mining, quarrying or prospecting right that you provide under an *interest realignment arrangement, assume to be zero the *market value of any contractual right conferred by the arrangement to an *interest realignment adjustment to be received by you.
In calculating the *cost of a *mining, quarrying or prospecting right that you receive under an *interest realignment arrangement, assume to be zero the *market value of any contractual right conferred by the arrangement to an *interest realignment adjustment to be provided by you.
The creation of a right to an *interest realignment adjustment does not cause *CGT event D1 or CGT event D3 to happen.
Your receipt of an *interest realignment adjustment does not cause *CGT event C2 to happen in relation to the right to receive the adjustment.
Meaning of interest realignment adjustment
An interest realignment adjustment is an amount, or an asset (other than a *mining, quarrying or prospecting right), that:
(a) is provided under an *interest realignment arrangement to a party to the arrangement by or on behalf of another party to the arrangement; and
(b) is provided as an adjustment, to the parties' contributions of value to the project to which the arrangement relates, that arises because information that has become available since the time the arrangement took effect indicates that the other party did not make an appropriate contribution at that time.
S 40-364 inserted by No 130 of 2015, s 3 and Sch 1 item 1, applicable in relation to interest realignment arrangements entered into after 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013.