Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p34
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 34/40)
Character Range: 1905579–1908201

subscription or purchase, at all times when some of the units in the *head entity of the *demerger group were so listed or available.
 (10) A *capital gain is disregarded for a *share in a company or an interest in a trust to the extent that, had you *acquired it on or after 20 September 1985, you could have chosen a roll‑over for the other *CGT event under Subdivision 124‑M (scrip for scrip roll‑over).
Example: Bill owns a unit in a trust that he acquired before 20 September 1985. He exchanges the unit for a unit in another trust worth $60 and $40 cash. He makes a capital gain of $50 because of CGT event K6.
 Had the unit been acquired after 20 September 1985, Bill would have been entitled to a partial roll‑over of the capital gain under Subdivision 124‑M to the extent that his capital proceeds constituted a replacement unit.
 Bill can therefore disregard 60/100 of the $50 gain ($30). The cost base of Bill's replacement unit is reduced by this amount. Bill must include the remaining $20 of the CGT event K6 gain in the calculation of his net capital gain or loss for the year.
Note: A capital gain or loss made by a demerging entity from CGT event K6 happening as a result of a demerger is also disregarded: see section 125‑155.

104‑235  Balancing adjustment events for depreciating assets and certain assets used for R&D: CGT event K7
 (1) CGT event K7 happens if:
 (a) a *balancing adjustment event occurs for a *depreciating asset you *held; and
 (b) at some time when you held the asset, you used it, or had it *installed ready for use, for:
 (i) a purpose other than a *taxable purpose; or
 (ii) the purpose to which paragraphs 40‑27(2)(a) and (b) relate (about second‑hand assets in residential property).
 (1A) However, subsection (1) does not apply if:
 (a) you are an *R&D entity and you could deduct an amount under section 40‑25 for the *depreciating asset if the following assumptions were made:
 (i) despite paragraph 40‑30(1)(c) and subsection 40‑30(2), all intangible assets were excluded from the definition of depreciating asset in section 40‑30;
 (ii) subsection 40‑45(2) did not, except in the case of buildings, prevent Division 40 from applying to capital works to which Division 43 applies, or to which Division 43 would apply but for expenditure being incurred, or capital works being started, before a particular day;
 (iii) you satisfied any relevant requirement for deductibility under Division 40; or
 (b) there is roll‑over relief for the *balancing adjustment event under section 40‑340 of this Act; or
 (c) the asset is one for which you or another entity has deducted or can