Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:3_2:p4
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 4/6)
Character Range: 28522–31267

*head company's *CGT assets just before the head company roll‑over event exceeded or was less than the sum of the cost bases of all of the head company's CGT assets just after the head company roll‑over event (the excess or shortfall being the head company roll‑over adjustment amount).

Adjustment to result of step 3 in allocable cost amount for head company roll‑over recipient
 (3) For the purpose of working out the group's *allocable cost amount for the head company roll‑over recipient, the result of step 3 in the table in section 705‑60 is reduced (if the head company roll‑over adjustment amount is an excess), or increased (if the head company roll‑over adjustment amount is a shortfall), by the amount worked out as follows:

where:
market value of all membership interests in head company roll‑over recipient means the *market value, at the formation time, of all *membership interests in the head company roll‑over recipient that are held by entities that become *members of the group at that time.

Adjustment to result of step 3 in allocable cost amount for interposed entity
 (4) Also, if this section applies, for the purpose of working out the group's *allocable cost amount for any entity (the target entity) that:
 (a) becomes a *subsidiary member of the group at the formation time; and
 (b) is interposed at that time between the *head company and the head company roll‑over recipient; and
 (c) is the first or only such interposed entity;
the result of step 3 in the table in section 705‑60 is reduced (if the head company roll‑over adjustment amount is an excess), or increased (if the head company roll‑over adjustment amount is a shortfall), by the amount worked out as follows:

where:
market value of all membership interests in head company roll‑over recipient has the same meaning as in subsection (3).
market value of head company's indirect membership interests in head company roll‑over recipient means so much of the *market value, at the formation time, of the *head company's *membership interests in the target entity as is attributable to membership interests that the entity holds directly, or indirectly through other interposed entities that become *subsidiary members of the group at the formation time, in the head company roll‑over recipient.
Note: If under subsection (3) or (4) the amount by which the result of step 3 is to be reduced exceeds that result, the excess is treated as a capital gain of the head company.

705‑155  Adjustment in working out step 4 of allocable cost amount for successive distributions through interposed entities

Object
 (1) The object of this section is to ensure that, in working out the group's *allocable cost amount for entities that become *subsidiary members