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The Issues Log

Issue: FE 6(1A)

Submission Number	70
Submitter	Withheld by request
Section / Provision Income Tax Act 2007
Section / Provision Income Tax Act 2004	FE 6(1A)
Date Received	05/06/08
Description of issue	It is not clear in the 2007 Act that under a resident\'s restricted amalgamation (formerly a \"qualifying amalgamation\") an amalgmating company does not derive income (or have any deductions)on the transfer of property. Further, the wording of section FO 10 could be interpreted as meaning that the amalgamating company has disposed of property at the price it paid for the property, as opposed to tax book value. Since this is not listed as an intended change in the 2007 Act, the position under the 2004 Act should apply i.e. the amalgamating company does not derive income (or have any deductions) on the transfer of property. An amalgamating company does not derive income and is not allowed deductions on the transfer of depreciable property under a qualifying amalgamation.
Section / Provision Income Tax Act 1994
Status	Finalised
Outcome	The Panel has concluded and agree there is an unintended legislative change arises in respect of section FO 10 of the Income Tax Act 2007. The Income Tax Act 2007 will be amended retrospectively to clarify taking into account the effect of a disposition by the amalgamating company to the amalgamated company.

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