The draft Ruling deals with the tax consequences for companies of issuing shares for assets. In particular it is about:
- whether and in what circumstances there might be a loss or outgoing in acquiring the assets for the purposes of s 8-1 of ITAA 1997, and the amount of that loss or outgoing;
- when and in what circumstances assets which were trading stock of the vendor might be taken to have been bought by the company and for what price, by reason of s 70-95;
- when and in what circumstances the assets might have a cost for the purposes of Division 40, and the amount of that cost; and
- when and in what circumstances the assets might have a cost base for the purposes of the capital gains tax provisions of Parts 3-1 and 3-3, and the amount of that cost base.
The draft Ruling does not deal with the tax consequences for taxpayers of receiving shares for assets.
For a copy of TR 2008/D1, go here