Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 4/16)
Character Range: 6740545–6743196

the equity or loan interests to which that realisation event happened, for the entities that owned those interests immediately before the time of that realisation event.
total reductions for affected interests means the total of:
 (a) all reductions under this Division, because of the indirect value shift, of *adjustable values of affected interests in the losing entity; and
 (b) if paragraph (b) of the definition of total disaggregated attributable decreases applies—the amounts by which section 727‑850 reduces the losses (if any) referred to in that paragraph.

Consequences of the method for various kinds of assets

727‑830  CGT assets
 (1) The *cost base of an *equity or loan interest is reduced or uplifted immediately before the *IVS time to the extent that this Division provides for the *adjustable value of the interest to be reduced or uplifted.
 (2) The *reduced cost base of an *equity or loan interest is reduced or uplifted immediately before the *IVS time to the extent that this Division provides for the *adjustable value of the interest to be reduced or uplifted.
 (3) However, the *cost base or *reduced cost base is uplifted only to the extent that the amount of the uplift is still reflected in the *market value of the interest when a later *CGT event happens to the interest.
 (4) To work out:
 (a) whether the *cost base or *reduced cost base of the interest is reduced or uplifted; and
 (b) if so, by how much;
assume that the adjustable value from time to time of that or any other *equity or loan interest is its cost base or reduced cost base, as appropriate.
 (5) If this Division provides for the *adjustable value of an *equity or loan interest to be both reduced and uplifted:
 (a) the reduction and uplift for which subsection (1) or (2) of this section provides offset each other to the extent of whichever of them is the lesser; but
 (b) if subsection (3) of this section cancels or reduces the uplift, this subsection is taken always to have applied on that basis.

Reductions and uplifts also apply to pre‑CGT assets
 (6) A reduction or uplift occurs regardless of whether the entity that owns the interest *acquired it before, on or after 20 September 1985.

727‑835  Trading stock
 (1) This section deals with:
 (a) how this Division applies to an *equity or loan interest that is *trading stock of an entity at the time (the adjustment time) immediately before the *IVS time; and
 (b) the income tax consequences of this Division reducing or uplifting the *adjustable value of the interest.
 (2) The interest's adjustable value at a particular time is:
 (a) if the interest has been *trading stock of the