DV 18B Cost base for shares when debt forgiven within economic group

For a shareholder of a company that is a calculation company under section CD 43(6B) or (6C) (Available subscribed capital (ASC) amount), an amount of the subscriptions amount under section CD 43(6D) for the calculation company is treated as expenditure incurred for the purchase of the shareholder’s shares in the calculation company. The maximum expenditure for the shareholder’s shares is the subscriptions amount under section CD 43(6D) for the calculation company multiplied by one of the following interests, determined before the application of section YC 4 (Look-through rule for corporate shareholders):

(a)

the shareholder’s voting interests in the calculation company; or

(b)

the shareholder’s market value interest in the calculation company, if there is a market value circumstance.

Defined in this Act: amount, company, expenditure, market value circumstance, market value interest, share, voting interest

Section DV 18B: inserted (with effect on 1 April 2008), on 30 March 2017, by section 51(1) (and see section 51(2)) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).