Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 1/12)
Character Range: 1929330–1932037

4                                                            There are both one or more overstated amounts and one or more understated amounts under section 705‑315 for the *subsidiary member and the sum of the overstated amounts is less than the sum of the understated amounts  There is a net understated amount. It is the difference between those sums

 (4) If the time when the Commissioner becomes aware of the errors is within the period within which the Commissioner may amend all of the assessments necessary to correct the errors, then, for the head company core purposes mentioned in subsection 701‑1(2):
 (a) if you have a *net overstated amount—you make a capital gain equal to that amount; or
 (b) if you have a *net understated amount—you make a capital loss equal to that amount.
 (5) If the time when the Commissioner becomes aware of the errors is not within that period, then, for the head company core purposes mentioned in subsection 701‑1(2):
 (a) if you have a *net overstated amount—you make a capital gain of the amount worked out under subsection (6); or
 (b) if you have a *net understated amount—you make a capital loss of the amount worked out under subsection (6).
 (6) The amount of the *capital gain or *capital loss is worked out as follows:
where:
current asset setting amount means the *tax cost setting amount for all assets referred to in subsection 705‑315(2) as reset cost base assets that the *head company of the *consolidated group or the *MEC group held continuously from the time when the *subsidiary member joined the group until the start of the head company's income year that is the earliest income year for which the Commissioner could amend the head company's assessment to correct any of the errors.
original asset setting amount means the *tax cost setting amount for all assets referred to in subsection 705‑315(2) as reset cost base assets that the *subsidiary member held at the time it joined the group.
stated amount means the *net overstated amount or the *net understated amount, as the case requires.

104‑535  Where reduction in tax cost setting amounts for reset cost base assets cannot be allocated: CGT event L8
 (1) CGT event L8 happens if:
 (a) an entity becomes a *subsidiary member of a *consolidated group or a *MEC group; and
 (b) the *tax cost setting amount for a reset cost base asset of the entity is reduced under subsection 705‑40(1) (including in its application in accordance with Subdivisions 705‑B to 705‑D); and
 (c) some or all (the unallocated amount) of the reduction cannot be allocated as mentioned in subsection 705‑40(2).
 (2) The time of the event is just after the entity becomes a *subsidiary member of the group.
 (3)