43B.   Base cost of assets of controlled foreign companies

 

Where the functional currency of a controlled foreign company –

 

(a)     was the currency of a country which-

 

(i)      abandoned its currency; and

 

(ii)     had an official rate of inflation of 100 per cent or more for the foreign tax year preceding the abandonment of the currency; and

 

(b)     the controlled foreign company adopted a new functional currency as a consequence of the abandonment contemplated in subparagraph (a)(i),

 

the controlled foreign company must, for the purposes of determining the base cost of an asset of the controlled foreign company, be deemed to have acquired the asset in that new currency-

 

(A)    on the first day of the foreign tax year of the controlled foreign company in which; and

 

(B)     for an amount equal to the market value of the asset on the date on which,

 

the new currency was adopted by the controlled foreign company.