Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p49
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 49/95)
Character Range: 5672642–5675441

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 registered emissions unit, the market value is included in the company's assessable income (section 420‑25).
 The company is also treated as having bought 5,000 emission reduction units for the same amount. As those units are trading stock, the company may be able to deduct that amount under section 8‑1.

420‑40  Disposal of registered emissions units for a purpose other than gaining assessable income
 (1) If:
 (a) an entity (the first entity) incurs expenditure in:
 (i) becoming the *holder of a *registered emissions unit; or
 (ii) ceasing to hold a registered emissions unit; and
 (b) the first entity has deducted or can deduct the expenditure under section 420‑15 or 420‑42; and
 (c) the first entity ceases to hold the unit in a particular income year; and
 (d) the cessation is neither:
 (i) in gaining or producing the first entity's assessable income; nor
 (ii) in carrying on a *business for the purpose of gaining or producing the first entity's assessable income; and
 (e) section 420‑30 (non‑arm's length transactions and transactions with associates) did not apply to the first entity ceasing to hold the unit;
the first entity's assessable income for that income year includes an amount equal to the amount the first entity has deducted or can deduct.

Death
 (2) If:
 (a) the first entity is an individual; and
 (b) the cessation is because of the first entity's death; and
 (c) the *registered emissions unit devolves to the first entity's *legal personal representative;
then:
 (d) the first entity's legal personal representative is treated as having bought the unit for the amount included in the first entity's assessable income under subsection (1); and
 (e) if the unit *passes to a beneficiary in the first entity's estate:
 (i) the first entity's legal personal representative is treated as having disposed of the unit for the amount included in the first entity's assessable income under subsection (1); and
 (ii) the beneficiary is treated as having bought the unit for the amount included in the first entity's assessable income under subsection (1).
 (3) If:
 (a) the first entity is an individual; and
 (b) the cessation is because of the first entity's death; and
 (c) the *registered emissions unit *passes to a beneficiary in the first entity's estate without devolving to the first entity's *legal personal representative;
the beneficiary is treated as having bought the unit for the amount included in the first entity's assessable income under subsection (1).

Transfer—treatment of acquirer
 (4) If:
 (a) the cessation is