Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 3/18)
Character Range: 2693296–2695975

may occur if the recipient company stops being a member of the wholly‑owned group while still owning the roll‑over asset: see section 104‑175.

126‑75  Originating company is a CFC
 (1) This section applies if:
 (a) there is a roll‑over for the trigger event under this Subdivision; and
 (b) the originating company was a *CFC at the time of the trigger event; and
 (c) this Subdivision is relevant to the calculation of the *attributable income of the originating company under Division 7 of Part X of the Income Tax Assessment Act 1936 because (ignoring the residency assumptions in that Division) the roll‑over asset was not *taxable Australian property for the originating company; and
 (d) a subsequent *CGT event happens in relation to the roll‑over asset.
 (2) In working out the amount of any *capital gain or *capital loss the recipient company (or a subsequent owner of the roll‑over asset if there is a series of roll‑overs until there is no roll‑over) makes when a subsequent *CGT event happens in relation to the asset, the modifications specified in Division 7 of Part X of the Income Tax Assessment Act 1936 apply.

126‑85  Effect of roll‑over on certain liquidations
 (1) A *capital gain a company (the holding company) makes because *shares in its *100% subsidiary are cancelled (an example of *CGT event C2: see section 104‑25) on the liquidation of the subsidiary is reduced if the conditions in subsection (2) are satisfied. The reduction is worked out under subsection (3).
 (2) These conditions must be satisfied:
 (a) there must be a roll‑over under this Subdivision for at least one *CGT asset that the subsidiary *acquired on or after 20 September 1985 (the CGT roll‑over asset) being *disposed of by the subsidiary to the holding company in the course of the liquidation of the subsidiary;
 (c) the disposals must either:
 (i) be part of the liquidator's final distribution in the course of the liquidation; or
 (ii) have occurred within 18 months of the dissolution of the subsidiary if they are part of an interim distribution in the course of the liquidation;
 (d) the holding company must have beneficially owned all of the shares in the subsidiary for the whole period from the time of the disposal, or the first disposal, of a CGT roll‑over asset until the cancellation of the shares;
 (e) the *market value of the CGT roll‑over asset or assets must comprise at least part of the *capital proceeds for the cancellation of the shares in the subsidiary that are beneficially owned by the holding company;
 (f) one or more of the shares that were cancelled (the post‑CGT shares) must have been acquired by the holding company on or after 20 September