Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p52
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 52/59)
Character Range: 2661294–2663961

to the matters specified in subsection (3).
Note 1: These rules replace the cost base and reduced cost base adjustments in CGT event E4 and CGT event G1.
Note 2: The head entity or the demerging entity may advise you of the proportions.
 (3) The matters are:
 (a) the *market values of your remaining original interests just after the *demerger, or an anticipated reasonable approximation of those market values; and
 (b) the market values of your new interests just after the demerger, or an anticipated reasonable approximation of those market values.
Example: To continue the example from subsection 125‑70(2), Company A advises its shareholders that Company B at that time represents 5% of the market value of the group as a whole. Peter's cost base for each of his shares in A is $4.60, and Peter recalculates his cost base as follows:
 to be spread over 400 shares in A and 24 shares in B.

Pre‑CGT interests
 (4) The following subsections apply if you choose the roll‑over and you *acquired some or all of your original interests before 20 September 1985.
 (5) If you *acquired all of your original interests before 20 September 1985, you are taken to have acquired all of your new interests before that day.
 (6) If you *acquired some of your original interests before 20 September 1985, you are taken to have acquired a reasonable whole number of your new interests before that day having regard to:
 (a) the *market values of your original interests and your remaining original interests just after the *demerger, or an anticipated reasonable approximation of those market values; and
 (b) the market values of your new interests just after the demerger, or an anticipated reasonable approximation of those market values.
 (7) If a proportion, but not all, of your original interests ends under the *demerger and you *acquired some of your original interests before 20 September 1985, that same proportion of those interests you acquired before that day ends.
Note: CGT event K6 may be relevant if you later dispose of your interests that are treated as being pre‑CGT.
Example: Bert owned 100 shares in a company of which 50 were acquired pre‑CGT. Under a demerger 20 of Bert's 100 shares were cancelled in exchange for new interests. As 20% of his shares were cancelled, 10 of his pre‑CGT shares are taken to have been cancelled.

Partial roll‑over
 (8) If you choose a roll‑over for some but not all of your original interests, you apply the rules in this section as if your original interests for which you chose the roll‑over were your only original interests.

125‑85  Cost base adjustments where CGT event happens but no roll‑over chosen
 (1) You must