Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p48
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 48/95)
Character Range: 5670176–5672877

Assessable income on disposal of registered emissions units
 (1) Your assessable income includes an amount that you are entitled to receive because you cease to *hold a *registered emissions unit.

Timing
 (2) The amount is included in your assessable income for the income year in which you cease to *hold the unit.

Source
 (3) An amount included in your assessable income under subsection (1) is taken, for the purposes of the *income tax laws, to have a source in Australia.

420‑30  Non‑arm's length transactions and transactions with associates
  If:
 (a) an entity (the transferor) ceases to *hold a *registered emissions unit; and
 (b) the cessation is because of the transfer of the unit to:
 (i) a Registry account (within the meaning of the Australian National Registry of Emissions Units Act 2011); or
 (ii) a foreign account (within the meaning of that Act);
  kept by another entity (the transferee); and
 (c) either:
 (i) the transferor and the transferee did not deal with each other at *arm's length; or
 (ii) the transferee is the transferor's *associate; and
 (d) the transferee did not pay or give consideration equal to the *market value of the unit for the transfer of the unit;
the transferor is treated as if the transferor were entitled to receive an amount equal to that market value because the transferor ceased to be the holder of the unit.

420‑35  Outgoing international transfers of emissions units
  If:
 (a) you stop *holding a *registered emissions unit; and
 (b) you do so as a result of the transfer of the unit to:
 (ii) if the unit is a *Kyoto unit—your foreign account (within the meaning of the Australian National Registry of Emissions Units Act 2011) or your nominee's foreign account (within the meaning of that Act); or
 (iii) if the unit is an *Australian carbon credit unit—your foreign account (within the meaning of the Carbon Credits (Carbon Farming Initiative) Act 2011) or your nominee's foreign account (within the meaning of that Act);
you are treated as if:
 (c) just before the transfer, you had sold the unit to someone else for its *market value just before the transfer; and
 (d) you had, immediately after the sale, bought it back for the same amount.
Example: An Australian resident company carries on a business of trading in emission units. The company owns 10,000 emission reduction units (a type of Kyoto unit) that are registered in Australia. 5,000 of those units are transferred from the company's Australian registry account to the company's New Zealand registry account.
 The company is treated as having sold each unit to someone else at its market value just before it stopped being a registered emissions unit. As the unit was a