Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_4:p8
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 8/8)
Character Range: 582751–584410

a debt by it in respect of a loan; and

 (c) the group company *acquired the share or debt on or after 20 September 1985; and

 (d) the money the group company paid for the share, or the borrowed money, has been applied (directly, or indirectly through one or more interposed entities):

 (i) in the other company or a third company acquiring shares in the gain company; or

 (ii) in a *borrowing by the gain company from the other company or from a third company; and

 (e) throughout the application year, the group company, the other company and the third company (if any) are all members of the same *wholly‑owned group as the gain company (disregarding, for a particular company, a period when it was not *in existence);

the *cost base and *reduced cost base of the share or debt are increased.

 (3) The *cost base and *reduced cost base are increased by an amount that is appropriate having regard to:

 (a) any consideration given by the gain company for the transferred amount; and

 (b) the group company's direct or indirect interest in the gain company.

Note: This is because the consideration may be less than the commercial value of the transferred net capital loss.

 (4) However, the increase cannot exceed the increase in the market value of the *share or debt that results from the amount of the *net capital loss being transferred. (If no increase in that market value results, the *cost base and *reduced cost base are not increased either.)

Note: This Subdivision is disregarded in calculating the attributable income of a CFC: see section 410 of the Income Tax Assessment Act 1936.

[The next Division is Division 175.]