Taxation Determination TD 95/28







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953 , is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue. However, this Determination does not apply to taxpayers to the extent that it conflicts with the terms of a settlement of a dispute agreed to before the date of issue of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20). | 1. No. The formulas contained in sections 160ZZRP and 160ZZRQ have to be applied in turn to each of the increased value shares. | 2. Subsection 160ZZRP(1) applies (assuming the requirements of section 160ZZRL are satisfied) if 'a particular increased value share' is a pre-CGT share. If there is more than one increased value share which is a pre-CGT share, the formulas contained in section 160ZZRP have to be applied to each of those shares in turn. Similarly, subsection 160ZZRQ(1) refers to 'a particular increased value share' which is a post-CGT share so that, if there is more than one such share, the formulas in section 160ZZRQ have to be applied to each one. | Example: There is a share value shift by changing the dividend rights attached to the two classes. As a result of the shift, each Class A share decreases in value by $15 and each Class B share increases by $30. | Section 160ZZRP applies because a particular increased value share (i.e., each of the Class B shares) is a pre-CGT share. The formulas in the section apply as follows. | (Increase in market value of each Class B share / Total market value increase of all Class B shares) x Decrease in market value of the Class A share | ($30 / $1500) x $15 = 30 cents | $80 x (30 cents / $100) = 24 cents | 30 cents - 24 cents = 6 cents | 6 cents x 50 shares = $3.00 | (Increase in market value of each Class B share / Total market value increase of all Class B shares) x (Decrease in market value of the Class A share / Market value of Class A share before the decrease) | ($30 / $1500) x ($15 / $100) | Therefore the indexed cost base of each Class A share is to be reduced by 3/1000 in relation to the value shift to each Class B share. | $80 * (3/1000 * 50) = $12 | Commissioner of Taxation 22/6/95 | Previously issued as Draft TD 94/D104


Legislative references: ITAA Pt IIIA-Div 19B; ITAA 160ZZP(2)(a)(ii); ITAA 160ZZRL; ITAA 160ZZRP; ITAA 160ZZRP(1); ITAA 160ZZRQ; ITAA 160ZZRQ(1)
Subject references: formulas; increased value share; share value shift