Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 1/2)
Character Range: 6785664–6788513

2                                              item 1 does not apply                                                                                               zero

Note: For the purposes of item 1 of the table, it is necessary to work out the active foreign business asset percentage of the subsidiary company before working out the active foreign business asset percentage of the foreign company.

768‑525  Book value method—choice made under subsection 768‑515(2)
 (1) The active foreign business asset percentage of the foreign company in relation to the holding company, at the time of the CGT event, is worked out under this section in this way.

      Method statement
           Step 1. Work out the foreign company's average value of total assets at that time under subsection (2).
           Step 2. Work out the foreign company's average value of active foreign business assets at that time under subsection (3).
           Step 3. Divide the result of step 2 by the result of step 1.
           Step 4. Express the result of step 3 as a percentage, and round that percentage to the nearest whole percentage point (rounding a number ending in .5 upwards).
           Step 5. The active foreign business asset percentage is:

                (a) if the result of step 4 is less than 10%—zero; or
                (b) if the result of step 4 is 10% or more, but less than 90%—that result; or
                (c) if the result of step 4 is 90% or more—100%.
Note: If the foreign company is a member of a wholly‑owned group, section 768‑535 may modify the way in which this section operates.
 (2) The foreign company's average value of total assets at the time of the CGT event is worked out in this way.

      Method statement
           Step 1. Work out the sum of the values (see subsection (5)) of every *asset included in the total assets of the foreign company at the end of the most recent period:

                (a) that ends no later than that time, but no more than 12 months before that time; and
                (b) for which the foreign company has *recognised company accounts.

           Step 2. Work out the sum of the values (see subsection (5)) of every *asset included in the total assets of the foreign company at the end of the most recent period:

                (a) that ends at least 6 months, but no more than 18 months, before the end of the period mentioned in step 1; and
                (b) for which the foreign company has *recognised company accounts.

                  Note: See subsection (6) if the foreign company does not have recognised company accounts for a period mentioned in this step.
           Step 3. Work out the sum of the results of steps 1 and 2, and divide that sum by 2.
 (3) The foreign company's average value of active foreign business assets at that time is worked out in