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Wednesday, 31 May 1972
Page: 2385

Senator COTTON (New South Wales) (Minister for Civil Aviation) - I am informed that in the proposed new section 6d the expression 'a share' does include shares in the plural sense. I have a further note dealing with the question of whether a profit made on the sale of shares bought for resale is subject to income tax when the shares are owned for 18 months before sale. Under the proposed new section 6d, profits or losses on the sales of listed shares will not be taken into account for income tax purposes provided certain conditions specified in the section are satisfied. These conditions are: (a) That the person selling the shares had continuously owned them for at least 18 months before sale; (b) the shares had been acquired on or after 12th April 1972, the day following the announcement of the proposed measures; (c) the shares were listed on the stock exchange at the time of acquisition or within 3 months afterwards; and (d) the persons had not acquired the shares as an incident in carrying on a business and had not notified the Commissioner of Taxation that the shares were acquired for the purpose of profit making by sale. Where all those conditions are satisfied the shares are to be treated as not having been acquired for the purposes of profit making by sale, so that any profit on a sale will not be assessable nor will any loss be deductible.

Senator Dame Nancy Buttfield - I am stil] not quite clear whether this carrying on of a business applies to an individual who has an investment company.

Senator COTTON - I was waiting for that point to be clarified. Whether share transactions are part of the carrying on of a business will depend upon the particular facts in each case. There will be a wide variation in the circumstances. It will depend upon the individual case that has to be handled by the Commissioner for evaluation. But that broad set of principles, I think, would aid the honourable senator. If the honourable senator would like a copy of it, I will get it for her.

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