Anti-avoidance rules

2010 amendments relating to the Emissions Trading Scheme, clarifying the trading stock rules and anti-avoidance.


Under the Income Tax Act, the disposal of certain items at a price below market value is deemed to take place at market value. This is to ensure that disposals for less than market value are not used as a mechanism to transfer wealth without appropriate tax consequences.

Prior to this amendment, the trading stock rules in section GC 1 were relied upon to apply a market value rule to emissions units. However, it was not certain that emissions units were trading stock for the purposes of this rule.

Key features

New section GC 3B states that section GC 1 applies to a disposal of emissions units as if the emissions unit were trading stock.

New GC 3B also preserves the exception formerly included in GC 1, which is that the rule does not apply to the surrender of an emissions unit.

Two further exceptions which relate to forestry rights and PFSI transfers are dealt with later in this TIB.

Application date

The amendment applies from 26 September 2008.