Commentary

D9.527 Acquisitions and disposals

Corporate tax
Corporate tax | Commentary

D9.527 Acquisitions and disposals

Corporate tax | Commentary

D9.527 Acquisitions and disposals

Special rules apply to determine how the cost and proceeds of the disposal of corporate strips are to be calculated1.

When a person converts an interest-bearing security into corporate strips he is treated as having acquired each corporate strip for an issue price that is in direct proportion to the market value of the security from which the strips were created, calculated using the following formula2

where:

  1.  

         A is acquisition cost of the converted corporate security (excluding any costs incurred with the acquisition3);

  2.  

         B is the market value of the corporate strip;

  3.  

         C is the

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