Actual v deemed - the edge of reality

Deeming is a legislative technique which creates a legal fiction for taxation purposes, and affixes the liability of a taxpayer by reference to the altered reality. There are many uses of deeming in Australian income tax legislation. In some instances, the deemed tax result relieves the normal tax result which would apply to a commercial outcome, in a manner which favourably avoids a tax liability for unrealised or non-cash impacts. In other instances, the deemed tax result preserves the tax status of assets, notwithstanding a new reality, for example, by favourably preserving the pre-CGT status of assets. Provisions of the taxing Acts which focus attention on a state of affairs "at the time" especially leave open the possibility that the referenced time for tax purposes may be an actual time (the commercial outcome) or deemed time (the deemed world of tax). This article studies and attempts to define the rule(s) for deeming in timing provisions.