Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p22
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 22/40)
Character Range: 1877357–1880030

is less than its *reduced cost base.

Exceptions
 (6) CGT event J1 does not happen if the conditions in section 104‑180 or 104‑182 are satisfied.
 (7) A *capital gain or *capital loss the recipient company makes is disregarded if the roll‑over asset is taken to have been *acquired by it before 20 September 1985 under Subdivision 126‑B (except where the roll‑over asset has stopped being a *pre‑CGT asset, for example, because of Division 149).
Note: CGT event J1 does not happen to a demerged entity or a member of a demerger group if CGT event A1 or C2 happens to a demerging entity under a demerger: see section 125‑160.

Acquisition rule
 (8) The recipient company is taken to have *acquired the roll‑over asset at the break‑up time.

Cost base adjustment
 (9) The first element of the recipient company's *cost base and *reduced cost base of the roll‑over asset (just after the break‑up time) is its *market value (at the break‑up time).

104‑180  Sub‑group break‑up
 (1) The condition in subsection (2) must have been satisfied at each time when there is a roll‑over within the *wholly‑owned group under Subdivision 126‑B for a *CGT event happening in relation to the roll‑over asset.
 (2) The originating company and the recipient company must have been members of a group of 2 or more companies (the sub‑group) within the *wholly‑owned group (excluding the ultimate holding company) for which one of these is satisfied:
 (a) if the sub‑group consists of 2 companies, either the recipient company is a 100% subsidiary of the other company (the holding company), or the other company is a 100% subsidiary of the recipient company (also the holding company);
 (b) if the sub‑group consists of 3 or more companies:
 (i) the recipient company is a 100% subsidiary of one of those other companies (also the holding company) and so are the other companies (except the holding company) in the sub‑group; or
 (ii) each of the companies in the sub‑group (except the recipient company) is a 100% subsidiary of the recipient company (also the holding company).
 (3) If the roll‑over event was the last in a series of *CGT events involving the roll‑over asset and there was a roll‑over within the *wholly‑owned group under Subdivision 126‑B for all the events, each company that was the originating company or the recipient company for the purposes of that Subdivision for one of those roll‑overs must have been members of the sub‑group at the time of each of the roll‑overs.
 (4) The conditions in subsection (5) or (6) must be satisfied just after the break‑up time.
 (5) If the recipient company was the holding company of the sub‑group, none of its *shares can be owned by: