Section 58: Cost base of assets.

(1) Subject to subsection (6) and section 61, the cost base of an asset purchased, produced or constructed by the taxpayer is the amount paid or incurred by the taxpayer in respect of the acquisition of the asset and includes the market value of any consideration in kind given for the asset. (2) Subject to subsection (3), the cost base of an asset acquired in a non-arm’s length transaction is the market value of the asset at the date of acquisition. (3) The cost base of an asset acquired from an associate or in a non-arm’s length transaction described in section 59 is the amount of the consideration deemed by section 59 to be received by the person disposing of the asset. (4) Where a part of an asset is disposed of, the adjusted cost base of the asset is apportioned between the part of the asset retained and the part disposed of in accordance with their market values at the time of disposal. (5) Expenses incurred to alter or improve a non-depreciable asset are added to the cost base of the asset. (6) Where a taxpayer has an asset at the date this Act comes into operation, its adjusted cost base at that date shall be— a) its cost base indexed in accordance with Tables to be published by the Commissioner under paragraph 9 of the Ninth Schedule; or b) if the asset has been held for more than ten years, or if the taxpayer so elects by notice in writing to the Commissioner within one year of the Act coming into operation, its market value. (7) Where a taxpayer holds an asset for more than twelve months commencing on or after the date this Act comes into operation, its adjusted cost base shall be its cost base indexed in accordance with Tables to be published by the Commissioner under paragraph 9 of the Ninth Schedule, but not so as to convert a gain into a loss or to increase a loss. (8) The cost base of a share received by the taxpayer as a dividend is the market value of the share at the time it is received.