Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 4/5)
Character Range: 6780632–6783277

foreign company) that is a foreign resident, in relation to the holding company mentioned in section 768‑505, at the time of the CGT event mentioned in that section, is worked out in accordance with this section.

Market value method
 (2) Work out that percentage under section 768‑520 if:
 (a) the holding company has made a choice under subsection 768‑515(1) in relation to the foreign company for that time; and
 (b) there is sufficient evidence of the *market value at that time of:
 (i) all *assets included in the total assets of the foreign company at that time; and
 (ii) all *active foreign business assets of the foreign company at that time.

Book value method
 (3) Work out that percentage under section 768‑525 if:
 (a) the holding company has made a choice under subsection 768‑515(2) in relation to the foreign company for that time; and
 (b) there are *recognised company accounts of the foreign company for a period that ends no later than that time, but no more than 12 months before that time; and
 (c) if the foreign company was in existence before the start of the period mentioned in paragraph (b)—there are recognised company accounts of the foreign company for a period that ends at least 6 months, but no more than 18 months, before the end of the period mentioned in paragraph (b).

Default method
 (4) Otherwise, that percentage is:
 (a) 100% (if this section is being applied for the purposes of section 768‑505 to reduce a *capital loss of the holding company); or
 (b) zero (in any other case).

768‑515  Choices to apply market value method or book value method

Choice for market value method
 (1) The holding company may choose to work out the *active foreign business asset percentage of the foreign company for the time of the CGT event under section 768‑520.

Choice for book value method
 (2) The holding company may choose to work out the *active foreign business asset percentage of the foreign company for the time of the CGT event under section 768‑525.

Method of making choice
 (3) The way an entity making a choice under subsection (1) or (2) prepares its *income tax return is sufficient evidence of the making of the choice.
Note: If an entity does not make a choice under subsection (1) or (2), it will work out the active foreign business asset percentage of the foreign company in accordance with the default method in subsection 768‑510(4).

768‑520  Market value method—choice made under subsection 768‑515(1)
 (1) The active foreign business asset percentage of the foreign company in relation to the holding company, at the time of the CGT event, is worked out under this section in this way.