Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_8:p3
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 8 (pt 3/14)
Character Range: 486935–489570

cost base of shares is varied.

140‑5  Map of this Division

Subdivision 140‑A—When is there share value shifting?

Table of sections

140‑10 Shifts in share values
140‑15 What is a share value shift?
140‑20 When is an entity a controller (for CGT purposes) of a company?
140‑22 When an entity has an associate‑inclusive control interest
140‑25 When is there a material decrease in the value of a share?
140‑30 Interests in shares etc.

140‑10  Shifts in share values

  This Division is relevant to *CGT event G2.

Note 1: CGT event G2 is set out in section 104‑140.

Note 2: The making of a capital gain from the event and cost base adjustments are dealt with in Subdivision 140‑B.

140‑15  What is a share value shift

 (1) A share value shift occurs if the requirements in subsections (2), (3) and (4) are satisfied.

 (2) The company, or the entity or the entity's *associate, must do something under a *scheme involving *shares in the company. Examples are issuing new shares at a *discount, buying back shares or changing the voting rights attached to shares.

Note 1: This Division is also relevant to interests in shares and rights or options to acquire shares: see section 140‑30.

Note 2: No cost base adjustments are required under this Division if the increase and decrease in market value occurred before 12 noon on 12 January 1994: see section 140‑7 of the Income Tax (Transitional Provisions) Act 1997.

 (3) There must be a decrease in the market value of one or more *shares (the decreased value shares) in the company that are owned by the entity or the entity's * associate.

  The shares must have been *acquired on or after 20 September 1985. The decrease must be reasonably attributable to the thing done under the *scheme, and must occur at or after the time when the thing is done under the *scheme.

 (4) The requirements in subsection (5) or (6) must be satisfied.

 (5) There must be an issue of *shares (the increased value shares) at a *discount to:

 (a) the entity or the entity's *associate; or

 (b) if any *decreased value share is owned by the entity's associate—an associate of that associate.

 (6) There must be an increase in the market value of one or more *shares (also the increased value shares) in the company owned by:

 (a) the entity or the entity's *associate; or

 (b) if any *decreased value share is owned by the entity's associate—an associate of that associate.

  The increase must be reasonably attributable to the thing done under the scheme, and must occur at or after the time when it is done.

Example: A company runs a family business. There are 2