Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 1/13)
Character Range: 6087952–6090593

5                                                                         If the amount remaining after step 4 is positive, it is the old group's allocable cost amount for the leaving entity. Otherwise the old group's allocable cost amount is nil.

Note: If the amount remaining after step 4 is negative, the head company is taken to have made a capital gain equal to the amount: see CGT event L5.

Recalculation in order to work out amount of capital loss
 (2) If it is necessary to work out whether the *head company makes a capital loss for a *CGT event that happens at or after the leaving time in relation to any of the *membership interests, the old group's allocable cost amount for the leaving entity is instead worked out as if the head company's *terminating value for any asset covered by subsection 705‑30(4) (as it applies for the purposes of section 711‑30) were instead equal to the asset's *reduced cost base just before the leaving time.

711‑25  Terminating values of the leaving entity's assets—step 1 in working out allocable cost amount
 (1) For the purposes of step 1 in the table in subsection 711‑20(1), the step 1 amount is worked out by adding up the *head company's *terminating values of all the assets that the head company holds at the leaving time because the leaving entity is taken by subsection 701‑1(1) (the single entity rule) to be a part of the head company.

Goodwill
 (2) If loss of control and ownership of the leaving entity by the *head company would decrease the *market value of the goodwill associated with assets or businesses of the old group (other than those of the leaving entity), the head company's *cost base of the asset consisting of goodwill that it holds at the leaving time because of its control and ownership of the leaving entity is added to the step 1 amount.
Note: If the asset arose because the head company acquired control and ownership of a joining entity, subsection 705‑35(3) would have applied in relation to the joining entity. The asset could also have arisen e.g. because the head company acquired a business from an entity without acquiring the entity.

Increase in step 1 amount for certain former privatised assets
 (3) If:
 (a) the *head company of the old group *holds a *depreciating asset at the leaving time because the leaving entity is taken by subsection 701‑1(1) (the single entity rule) to be a part of the head company; and
 (b) the asset's *tax cost was set at the *tax cost setting amount when an entity (whether the leaving entity or another entity) became a *subsidiary member of the old group; and
 (c) the tax cost setting amount for the asset was