Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:15_3:p4
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 15 cl 3 (pt 4/13)
Character Range: 396343–398930

of the method for various kinds of assets

727‑830  CGT assets
 (1) The *cost base of an *equity or loan interest is reduced or uplifted immediately before the *IVS time to the extent that this Division provides for the *adjustable value of the interest to be reduced or uplifted.
 (2) The *reduced cost base of an *equity or loan interest is reduced or uplifted immediately before the *IVS time to the extent that this Division provides for the *adjustable value of the interest to be reduced or uplifted.
 (3) However, the *cost base or *reduced cost base is uplifted only to the extent that the amount of the uplift is still reflected in the market value of the interest when a later *CGT event happens to the interest.
 (4) To work out:
 (a) whether the *cost base or *reduced cost base of the interest is reduced or uplifted; and
 (b) if so, by how much;
assume that the adjustable value from time to time of that or any other *equity or loan interest is its cost base or reduced cost base, as appropriate.
 (5) If this Division provides for the *adjustable value of an *equity or loan interest to be both reduced and uplifted:
 (a) the reduction and uplift for which subsection (1) or (2) of this section provides offset each other to the extent of whichever of them is the lesser; but
 (b) if subsection (3) of this section cancels or reduces the uplift, this subsection is taken always to have applied on that basis.

Reductions and uplifts also apply to pre‑CGT assets
 (6) A reduction or uplift occurs regardless of whether the entity that owns the interest *acquired it before, on or after 20 September 1985.

727‑835  Trading stock
 (1) This section deals with:
 (a) how this Division applies to an *equity or loan interest that is *trading stock of an entity at the time (the adjustment time) immediately before the *IVS time; and
 (b) the income tax consequences of this Division reducing or uplifting the *adjustable value of the interest.
 (2) The interest's adjustable value at a particular time is:
 (a) if the interest has been *trading stock of the entity ever since the start of the income year of the entity in which that time occurs—its *value as trading stock at the start of the income year; or
 (b) otherwise—its cost.
 (3) If this Division reduces or uplifts the interest's *adjustable value, the entity is treated as if:
 (a) immediately before the adjustment time, the entity had sold the interest to someone else (at *arm's length and in the ordinary course of business) for its *adjustable value immediately before that time; and
 (b) immediately after the