Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_6:p6
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 6 (pt 6/14)
Character Range: 146047–148760

entity's next *alteration time happens, the reference time under subsection 165‑115L(2) or 165‑115M(2) is the time just after the most recent alteration time for the *head company before the leaving time.

 (4) The leaving entity is a loss company at the leaving time if, and only if, the *head company would have had an *adjusted unrealised loss at the most recent *alteration time (the head company alteration time) for the head company before the leaving time if that adjusted unrealised loss (if any) were worked out on the basis that:
 (a) the head company chooses whether the *individual asset method or the *global method is used; and
 (b) a *CGT asset is taken into account only if:
 (i) the head company owned it at the head company alteration time; and
 (ii) it becomes a CGT asset of the leaving entity at the leaving time because subsection 701‑1(1) (the single entity rule) ceases to apply to the entity; and
 (c) if the individual asset method is used, then for the purposes of:
 (i) step 1 of the method statement in subsection 165‑115U(1); and
 (ii) the method statement in subsection 165‑115W(1);
  the head company had no earlier alteration time.

 (5) If the leaving entity is a *loss company at the leaving time, its overall loss at that time is the *adjusted unrealised loss worked out under subsection (4).

715‑255  Consequences if leaving entity is a loss company at the leaving time

 (1) If:
 (a) section 715‑245 or 715‑250 applies; and
 (b) the leaving entity is a *loss company at the leaving time;
the head company must choose whether subsection (2) or (3) of this section has effect for the purposes of applying, to each *membership interest in the leaving entity, in relation to the time just before the leaving time, whichever of these provisions is appropriate:
 (c) subsection 701‑55(3) (about trading stock);
 (d) subsection 701‑55(5), but only so far as it relates to working out the *reduced cost base of a *membership interest that was *acquired on or after 20 September 1985;
 (e) subsection 701‑55(6) (about revenue assets).

Note: Section 701‑55 is about setting the tax cost of an asset.

 (2) If the *head company chooses this subsection, the interest's *tax cost setting amount (apart from this section) just before the leaving time is reduced to nil.

 (3) If the *head company chooses this subsection, the interest's *tax cost setting amount (apart from this section) just before the leaving time is reduced by the adjustment amount under section 165‑115ZB, which is calculated on the basis that:
 (a) just before the leaving time, all the *membership interests in the leaving entity constituted a single relevant equity interest under section 165‑115X that the head