Private ruling: Cost base of shares
Published: February 2015
Ruling period: XX/XX/XXXX to XX/XX/XXXX
Date scheme commenced: XX/XX/XXXX

Ruling: Q1: Where the head company (Head Co) of a tax consolidated group (TCG) subscribed for shares (New Shares) in its subsidiary company (Sub Co) at a price in excess of their market value at the time of issue (such excess referred to herein as the Premium) and the purpose or expected effect of paying the Premium was to preserve or increase the value of the shares in Sub Co held by Head Co immediately prior to the subscription (Existing Shares), is the amount of the Premium included in the cost base of the Existing Shares as a fourth element pursuant to subsections 110-25(5) and 112-30(1A) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: Yes

Relevant facts and circumstances: The taxpayer, applied for a ruling in relation to a recapitalisation. Relevant facts and documents were submitted.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 103-5 | Income Tax Assessment Act 1997 s ubdivision 110-A | Income Tax Assessment Act 1997 section 110-25 | Income Tax Assessment Act 1997 s ubsection 110-25(1) | Income Tax Assessment Act 1997 s ubsection 110-25(2) | Income Tax Assessment Act 1997 subsection 110-25(5) | Income Tax Assessment Act 1997 Division 112 | Income Tax Assessment Act 1997 section 112-20 | Income Tax Assessment Act 1997 subsection 112-20(1) | Income Tax Assessment Act 1997 paragraph 112-20(1)(c) | Income Tax Assessment Act 1997 section 112-30 | Income Tax Assessment Act 1997 s ubsection 112-30(1) | Income Tax Assessment Act 1997 subsection 112-30(1A)


This notice must not be taken to imply anything about: | ● the binding nature of the private advice issued to the applicant | ● the correctness of other edited versions.