Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 9/19)
Character Range: 5856526–5859075

of assets to which subsections (1) and (2) apply; and
 (c) if the head company does not make such a choice—subsections (1) and (2) apply sequentially to each of those assets according to the time at which they were created, from earliest to latest.
Note: Once the amount of the capital gain is reduced to nil as a result of the application of subsections (1) and (2), no further reductions of tax cost setting amount can be made under those subsections.
 (4) A choice the *head company can make under paragraph (3)(b) must be made:
 (a) by the day the head company lodges its *income tax return for the income year in which the *CGT event happened; or
 (b) within a further time allowed by the Commissioner.
 (5) The way the *head company prepares its *income tax return is sufficient evidence of the making of the choice.

705‑30  What is the joining entity's terminating value for an asset?

Trading stock
 (1) If an asset of the joining entity is *trading stock, the joining entity's terminating value for the asset is:
 (a) if the asset was on hand at the start of the income year in which the joining time occurs (including because of the operation of Division 701)—its *value at that time; or
 (b) if paragraph (a) does not apply and the asset is *live stock that was acquired by natural increase—the *cost of the asset; or
 (c) in any other case—the amount of the outgoing incurred by the joining entity in connection with the acquisition of the asset;
increased by the amount of any outgoing forming part of the cost of the asset that is incurred by the joining entity during its current holding of the asset.

Registered emissions units
 (1A) If an asset of the joining entity is a *registered emissions unit, the joining entity's terminating value for the unit is equal to:
 (a) if the unit was *held by the joining entity at the start of the income year—the *value of the unit at the start of the income year; or
 (b) otherwise—the expenditure incurred by the joining entity in becoming the holder of the unit.

Qualifying securities
 (2) If an asset of the joining entity is a qualifying security (within the meaning of Division 16E of Part III of the Income Tax Assessment Act 1936) that is not *trading stock, the joining entity's terminating value for the asset is equal to the amount of consideration that the joining entity would need to receive, if it were to dispose of the asset just before the joining time, without an amount being assessable income of, or deductible to, the joining entity under section 159GS of the Income Tax