Document ID: chunk:federal_register_of_legislation:C2025C00014:section:70b:p2
Version: federal_register_of_legislation:C2025C00014
Segment Type: section
Provision Reference: s 70B (pt 2/3)
Character Range: 401131–403674

security, is satisfied that the parties were not dealing with each other at arm's length in relation to the transaction, then, for the purposes of determining under subsection (2) the amount of any loss on the disposal or redemption, the consideration for the transaction shall be taken to be:
 (a) the amount that might reasonably be expected for the transaction if the parties were independent parties dealing at arm's length with each other; or
 (b) where, for any reason it is not possible or practicable for the Commissioner to ascertain that amount—such amount as the Commissioner determines.
 (4) If:
 (a) a taxpayer disposes of a traditional security or a traditional security of a taxpayer is redeemed; and
 (b) there is a loss on the disposal or redemption; and
 (c) in the case of a disposal or redemption of a marketable security:
 (i) the taxpayer did not acquire the security in the ordinary course of trading on a securities market; and
 (ii) at the time the taxpayer acquired the security, it was not open to the taxpayer to acquire an identical security in the ordinary course of trading on a securities market; and
 (d) in the case of a disposal of a marketable security—the disposal did not take place in the ordinary course of trading on a securities market; and
 (e) having regard to:
 (i) the financial position of the issuer of the security; and
 (ii) perceptions of the financial position of the issuer of the security; and
 (iii) other relevant matters;
  it would be concluded that the disposal or redemption took place for the reason, or for reasons that included the reason, that there was an apprehension or belief that the issuer was, or would be likely to be, unable or unwilling to discharge all liability to pay amounts under the security;
a deduction is not allowable to the taxpayer under this section in respect of so much of the amount of the loss as is a loss of capital or a loss of a capital nature.
 (5) A reference in this section to the disposal by a taxpayer of a security, or to the redemption of a security of a taxpayer, does not include a reference to the waiver or release by the taxpayer of:
 (a) the whole or a part of the debt the subject of the security; or
 (b) any other right of the taxpayer under the security.
 (6) Subsection (5) does not, by implication, affect the meaning of an expression used in:
 (a) a provision of this Act other than this section; or
 (b) any other law of the Commonwealth.
 (7) In this section:
issuer, in relation to a security at a particular time, means the