Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_8:p12
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 8 (pt 12/14)
Character Range: 508468–511153

gain if the *shift proceeds are more than the part of those shares' *cost base worked out under subsection (4).

Note: The entity cannot make a capital loss.

 (3) The shift proceeds are:

Example: To continue the example, suppose someone else (who is not an associate of the controller) owns 50 shares in the company. Each one increases in value from $20 to $60.

 The total share value increase is:

 The controller's shift proceeds are:

Note: This represents the decrease in the market value of the controller's shares which has shifted into other shares owned by the controller or the controller's associate.

 (4) The part of those *shares' *cost base is:

Example: To continue the example, suppose the cost base of the controller's shares just after they decreased in value is $5,000. Their market value just before they decreased in value is $10,000.

 The part of those shares' cost base is:

 The controller makes a capital gain of $2,000 ‑ $1,000 = $1,000.

140‑95  Adjustments to cost base and reduced cost base

 (1) The *cost base and *reduced cost base of each *decreased value share that has *materially decreased in market value are reduced by the lesser of the following:

 (a) this fraction:

 (b) the amount of the decrease in the market value of the share.

Example: To continue the example in section 140‑90, the cost base and reduced cost base of each of the controller's shares is $50. Each one decreased in value from $100 to $60.

 The $50 is reduced by:

 This is less than $40 (the decrease in the market value of each of the controller's shares). So, the cost base and reduced cost base of each one are reduced from $50 to $40.

 (2) The reduction occurs when the *share value shift happens.

Division 149—When an asset stops being a pre‑CGT asset

Table of Subdivisions

149‑A Key concepts

149‑B When asset of non‑public entity stops being a pre‑CGT asset

149‑C When asset of public entity stops being a pre‑CGT asset

149‑D How to treat holdings of less than 1% in certain entities

149‑E How to treat certain interposed funds, companies and government bodies

149‑F How to treat a "demutualised" public entity

Subdivision 149‑A—Key concepts

Table of sections

149‑10 What is a pre‑CGT asset?
149‑15 Majority underlying interests in a CGT asset

149‑10  What is a pre‑CGT asset?

  A *CGT asset that an entity owns is a pre‑CGT asset if, and only if:

 (a) the entity last acquired the asset before 20 September 1985; and

 (b) the entity was not, immediately before the start of the 1998‑99 income year, taken under:

 (i) subsection 160ZZS(1) of the Income Tax Assessment Act 1936; or

 (ii) Subdivision C of Division