Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_1:p11
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 11/13)
Character Range: 126125–128752

(2) A choice under this section has effect accordingly. The pool is distinct from any other loss denial pool of the leaving entity.

 (3) When the pool is created, its loss denial balance is equal to the *head company's *final RUNL at the leaving time.

Note: If the head company makes this choice, the leaving entity can choose to cancel the loss denial pool by reducing reduced cost bases of assets in the pool: see section 715‑185.

[The next section is section 715‑120.]

Effect of assets in loss denial pool of head company becoming assets of leaving entity

715‑120  What happens

 (1) This section applies if:
 (a) at a particular time (the leaving time), an entity (the leaving entity) ceases to be a *subsidiary member of a *consolidated group; and
 (b) just before the leaving time, the *head company had a *loss denial pool; and
 (c) at the leaving time, at least one *CGT asset (a leaving asset) that was in the pool just before that time becomes a CGT asset of the leaving entity because subsection 701‑1(1) (Single entity rule) ceases to apply to the entity;

 (2) Each leaving asset leaves the *loss denial pool at the leaving time.

 (3) If:
 (a) the leaving entity is a company and the leaving time is not a *changeover time for the leaving entity; or
 (b) the leaving entity is a trust;
the *head company must make one of the choices for which sections 715‑125, 715‑130 and 715‑135 provide.

For provisions about making one of these choices,
see sections 715‑175 to 715‑185.

715‑125  First choice: adjustable values of leaving assets reduced to nil

  The first choice is to reduce the *adjustable value of each leaving asset to nil. The choice has effect accordingly, just before the leaving time. The *loss denial balance of the *head company's *loss denial pool is not reduced because of it.

Note: The consequences of the choice are worked out under section 715‑145.

715‑130  Second choice: pool's loss denial balance applied in reducing adjustable values of leaving assets that are loss assets

 (1) The second choice is to reduce under this section the *adjustable value of each leaving asset (a loss asset) for which the *head company would have had a notional capital loss, or notional revenue loss, under section 165‑115F at the time (the test time) just before the leaving time if the test time had been a *changeover time for the head company. The choice has effect accordingly.

Note: The consequences of the choice are worked out under this section and section 715‑145.

 (2) If:
 (a) 2 or more entities cease to be *subsidiary members of the *consolidated group; and
 (b) 2 or more of them