Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p19
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 19/30)
Character Range: 6192307–6195039

company's final RUNL applied in reducing adjustable values of leaving assets that are loss assets
715‑110 Third choice: loss denial pool of leaving entity created

Effect of assets in loss denial pool of head company becoming assets of leaving entity
715‑120 What happens
715‑125 First choice: adjustable values of leaving assets reduced to nil
715‑130 Second choice: pool's loss denial balance applied in reducing adjustable values of leaving assets that are loss assets
715‑135 Third choice: loss denial pool of leaving entity created

Effect of first and second choices on various kinds of assets
715‑145 Effect of choice on adjustable value of leaving asset

General provisions about loss denial pools
715‑155 When asset leaves pool
715‑160 How loss denial balance is applied to losses realised on assets in pool
715‑165 When pool ceases to exist

Choices under this Subdivision
715‑175 When choice must be made
715‑180 Head company to notify leaving entity of choice
715‑185 Leaving entity may choose to cancel loss denial pool by reducing adjustable values of assets in the pool

Object

715‑15  Object of this Subdivision
 (1) The object of this Subdivision is to give effect to the purposes of Subdivision 165‑CC (about change of ownership or control of a company that has an unrealised net loss) in these cases:
 (a) on formation of a *consolidated group, a *CGT asset held directly by the *head company is affected by that Subdivision, and the *business continuity test is failed;
 (b) on an entity becoming a *subsidiary member of a consolidated group, an asset consisting of:
 (i) a *membership interest that a *member of the group (including a chosen transitional entity under Division 701 of the Income Tax (Transitional Provisions) Act 1997) holds in the entity; or
 (ii) a liability that the entity owes to such a member;
  is affected by that Subdivision, and the business continuity test is failed;
 (c) on a company becoming a subsidiary member:
 (i) a CGT asset of the company that becomes an asset of the head company is affected by that Subdivision; and
 (ii) because the company is a chosen transitional entity, the asset does not have its tax cost reset; and
 (iii) the business continuity test is failed;
 (d) on an entity ceasing to be a subsidiary member, a CGT asset of the head company that becomes an asset of the entity is affected by that Subdivision, and the business continuity test is failed.
Note: Subdivision 165‑CC also affects an entity that has deferred losses under Subdivision 170‑D on assets that it formerly owned. Subdivision 715‑D gives effect to the purposes of Subdivision 165‑CC if such an entity becomes a member of a consolidated group.
 (2) This Subdivision achieves its object by