Document ID: chunk:federal_register_of_legislation:C2025C00029:section:8:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 8 (pt 1/2)
Character Range: 5896241–5899011

8                                                                            If the remaining amount is positive, it is the joined group's allocable cost amount. Otherwise the joined group's allocable cost amount is nil.

Note: The head company may be taken to have made a capital gain, depending on the amount remaining after applying step 3A: see CGT event L2.

705‑62  No double counting of amounts in allocable cost amount
 (1) The object of this section is to prevent a particular amount from being taken into account more than once in calculating the *allocable cost amount for the joining entity, in order to promote the object of this Subdivision set out in section 705‑10.
 (2) Subsection (3) applies if, apart from this section, 2 or more provisions of this Act operate with the result of altering:
 (a) the *allocable cost amount for the joining entity; or
 (b) the allocable cost amount for another entity that becomes a *subsidiary member of the group at the joining time;
because of a particular economic attribute of the joining entity (see subsection (6)).
 (3) Only one of those alterations is to be made, as follows:
 (a) if the *head company of the group makes a choice in accordance with subsections (4) and (5)—the alteration specified in the choice is to be made;
 (b) otherwise—the alteration that is most appropriate (in the light of the object of this Subdivision) is to be made.
 (4) A choice mentioned in paragraph (3)(a) must be made:
 (a) by the day the *head company of the group lodges its *income tax return for the income year in which the joining time occurs; or
 (b) within a further time allowed by the Commissioner.
 (5) A choice mentioned in paragraph (3)(a) must be made in writing.
 (6) The economic attributes of the joining entity mentioned in subsection (2) include the following:
 (a) the joining entity's retained profits;
 (b) the joining entity's distributions of profits to other entities;
 (c) the joining entity's realised and unrealised losses;
 (d) the joining entity's deductions;
 (e) the joining entity's accounting liabilities (within the meaning of subsection 705‑70(1));
 (f) consideration received by the joining entity for issuing *membership interests in itself.

705‑65  Cost of membership interests in the joining entity—step 1 in working out allocable cost amount
 (1) For the purposes of step 1 in the table in section 705‑60, the step 1 amount is the sum of the following amounts for each *membership interest that *members of the joined group hold in the joining entity at the joining time:
Note: If the joining entity is a trust, the step 1 amount may be increased by section 713‑20 for settled capital that could be distributed tax free in respect of discretionary interests in the trust.

Working out