Taxation Laws Amendment Act (No. 8) 2003 (107 of 2003)

Schedule 2   Various amendments relating to consolidated groups

Part 3   CGT event in respect of reduction in tax cost setting amounts for reset cost base assets

Income Tax Assessment Act 1997

8   At the end of Subdivision 104-L

Add:

104-535 Where reduction in tax cost setting amounts for reset cost base assets cannot be allocated: CGT event L8

(1) CGT event L8 happens if:

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

(b) the *tax cost setting amount for a reset cost base asset of the entity is reduced under subsection 705-40(1) (including in its application in accordance with Subdivisions 705-B to 705-D); and

(c) some or all (the unallocated amount ) of the reduction cannot be allocated as mentioned in subsection 705-40(2).

(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 unallocated amount.