Document ID: chunk:federal_register_of_legislation:C2025C00014:section:63e:p2
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 63E (pt 2/2)
Character Range: 390412–392074

later equity disposal etc.
 (4) If a debt/equity swap occurs and the taxpayer later disposes of any of the shares or units or they are cancelled or redeemed:
 (a) except in accordance with paragraph (b), no amount is included in, or allowable as a deduction from, the taxpayer's assessable income of any year of income under this Act in respect of the later disposal, cancellation or redemption; and
 (b) if the consideration received or receivable by the taxpayer in respect of the disposal, cancellation or redemption is different from the equity value of the shares or units:
 (i) if the consideration is greater—the difference is included in the taxpayer's assessable income of the year of income in which the disposal, cancellation or redemption occurs; or
 (ii) if it is less—the difference is allowable as a deduction from that assessable income.

Consideration of a nil amount
 (5) For the purposes of subsection (4), if no consideration is received or receivable by the taxpayer in respect of the disposal, cancellation or redemption, then consideration of a nil amount is taken to have been so received or receivable.
 (5A) Subdivisions 165‑C, 166‑C and 175‑C of the Income Tax Assessment Act 1997 apply to an allowable deduction under this section in respect of the whole or part of a debt that is extinguished, in the same way as they apply to a debt (or part of a debt) that is written off as bad.

Meaning of arrangement
 (6) In this section:
arrangement means any agreement, arrangement, understanding, promise, undertaking or scheme, whether express or implied, and whether or not enforceable, or intended to be enforceable, by legal proceedings.