Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p12
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 12/17)
Character Range: 592447–595325

amount of liabilities required in working out allocable cost amount
701‑35 Act, transaction or event giving rise to CGT event for pre‑formation roll‑over after 16 May 2002 to be disregarded if cost base etc. would be different
701‑40 When entity leaves transitional group, head company may choose, for purposes of transitional group's allocable cost amount, to increase terminating values of over‑depreciated assets
701‑45 When entity leaves transitional group, head company may choose, for purposes of transitional group's allocable cost amount, to use formation time market values, instead of terminating values, for certain pre‑CGT assets
701‑50 Increased allocable cost amount for leaving entity if it takes privatised asset brought into group by chosen transitional entity

701‑15  Tax cost and trading stock value not set for assets of chosen transitional entities
  Section 701‑10 (cost to head company of assets of joining entity) and subsection 701‑35(4) (setting value of trading stock at tax‑neutral amount) of the Income Tax Assessment Act 1997 do not apply to the assets of a chosen transitional entity.
Note: The fact that the head company inherits the entity's history under section 701‑5 of that Act when the entity becomes a subsidiary member of the group means that the entity's assets would be treated as having the same cost as they would for the entity at that time.

701‑20  Working out allocable cost amount on formation for subsidiary members other than chosen transitional entities

When section applies
 (1) This section applies if any of the transitional entities in the transitional group is a chosen transitional entity.

Allocable cost amount to be worked out in special way
 (2) If this section applies, the group's allocable cost amount for each of the entities, other than a chosen transitional entity, that become subsidiary members when the group comes into existence (each of which is a non‑chosen subsidiary) is worked out in a special way.

How to work out allocable cost amount
 (3) The allocable cost amount for each non‑chosen subsidiary is the sum of:
 (a) the head company adjusted allocable amount for the non‑chosen subsidiary (see subsection (4)); and
 (b) for each sub‑group (see subsection (6)) that exists in relation to the non‑chosen subsidiary—the sub‑group's notional allocable cost amount (see subsection(5)) for the non‑chosen subsidiary.

Head company adjusted allocable amount
 (4) The head company adjusted allocable amount for the non‑chosen subsidiary is the amount that would be the transitional group's allocable cost amount for that entity if;
 (a) the holding of all sub‑group membership interests were disregarded; and
 (b) only the following proportion of each of the step 2 to step 7 amounts in the table in section 705‑60 of the Income Tax Assessment Act 1997 was taken into account:

  where:
  market value