New Business Tax System (Consolidation and Other Measures) Act 2003 (16 of 2003)

Schedule 21   Consolidation: CGT events relating to various cost base provisions

Income Tax Assessment Act 1997

3   After section 104-500

Insert:

104-505 Where pre-formation intra-group roll-over reduction results in negative allocable cost amount: CGT event L2

(1) CGT event L2 happens if:

(a) an entity becomes a *subsidiary member of a *consolidated group; and

(b) in working out the group's *allocable cost amount for the entity, the amount remaining after applying step 3A of the table in section 705-60 (after any application of section 705-150) is negative.

(2) The time of the event is just after the entity becomes a *subsidiary member of the group.

(3) For the head company core purposes mentioned in subsection 701-1(2), the *head company makes a capital gain equal to the amount remaining.

104-510 Where tax cost setting amounts for retained cost base assets exceeds joining allocable cost amount: CGT event L3

(1) CGT event L3 happens if:

(a) an entity becomes a *subsidiary member of a *consolidated group; and

(a) the sum of:

(i) the *tax cost setting amounts for all of the *retained cost base assets that become those of the *head company of the group because subsection 701-1(1) (the single entity rule) applies;

exceeds:

(ii) the group's *allocable cost amount for the entity.

(2) The time of the event is just after the entity becomes a *subsidiary member of the group.

(3) For the head company core purposes mentioned in subsection 701-1(2), the *head company makes a capital gain equal to the excess.

104-515 Where no reset cost base assets and excess of net allocable cost amount on joining: CGT event L4

(1) CGT event L4 happens if:

(a) an entity becomes a *subsidiary member of a *consolidated group; and

(b) in working out the *tax cost setting amount for assets of the entity in accordance with section 705-35 (including in its application in accordance with Subdivisions 705-B to 705-D), there is an amount that results after applying paragraphs 705-35(1)(b) and (c) (including in their application in accordance with those Subdivisions); and

Note: Section 705-35 is about the tax cost setting amount for reset cost base assets.

(c) it is not possible to allocate, in accordance with the latter paragraph, the amount that results because there are no reset cost base assets of the kind mentioned in that paragraph.

(2) The time of the event is just after the entity becomes a *subsidiary member of the group.

(3) For the head company core purposes mentioned in subsection 701-1(2), the *head company makes a capital loss equal to the amount that results.

104-520 Where amount remaining after step 4 of leaving allocable cost amount is negative: CGT event L5

(1) CGT event L5 happens if:

(a) an entity ceases to be a *subsidiary member of a *consolidated group; and

(b) in working out the group's *allocable cost amount for the entity, the amount remaining after applying step 4 of the table in section 711-20 is negative.

(2) The time of the event is when the entity ceases to be a *subsidiary member of the group.

(3) For the head company core purposes mentioned in subsection 701-1(2), the *head company makes a capital gain equal to the amount remaining.