Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_8:p11
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 8 (pt 11/14)
Character Range: 506068–508709

second amount is:

 (4) The third amount is worked out differently, depending on whether the increase in the *cost base or *reduced cost base of each *increased value share is being worked out.

Increase in cost base

 (5) If the increase in the *cost base of each *increased value share is being worked out, work out:

 • the total reduction in the *cost bases of the entity's *decreased value shares: see subsection (6);

less:

 • the amount worked out under subsection 140‑55(5) (which is the part of the cost base of the entity's decreased value shares relevant to the working out of any capital gain).

  This amount is then apportioned to each increased value share in proportion to its *cost base. The amount apportioned is the third amount.

 (6) The total reduction in the *cost bases of the entity's *decreased value shares is:

Example: To continue the example, the cost base and reduced cost base of each of the controller's 800 class A shares (the decreased value shares) is $20. The total of their cost bases is $16,000.

 The total reduction is:

 The part of the cost base of those shares relevant to working out any capital gain is $5,600: see section 140‑60.

 The third amount is:

 This is the smallest of the 3 amounts.

 The smaller of the 2 amounts worked out under section 140‑70 is $1,000.

 The total of the cost bases of the controller's 200 class B shares is $4,000: see section 140‑65.

 This is increased by:

 (or the cost base of each of the controller's 200 class B shares is increased by $13).

Increase in reduced cost base

 (7) If the increase in the *reduced cost base of each *increased value share is being worked out, the third amount is:

Value shifted to shares acquired before 20 September 1985

140‑90  Making a capital gain

 (1) This section sets out what happens if a *share value shift results in *shares that were *acquired before 20 September 1985 becoming *increased value shares.

Example: A controller of a company owns 100 shares in the company that were acquired in 1999. A share value shift causes each one to fall in value from $100 to $60.

 The controller's associate owns 50 shares in the company that were acquired in 1984. Each one (the increased value shares) increases in value from $20 to $60.

 (2) An entity owning *decreased value shares that have *materially decreased in market value makes a capital gain if the *shift proceeds are more than the part of those shares' *cost base worked out under subsection (4).

Note: The entity cannot make a capital loss.

 (3) The shift proceeds are:

Example: To continue the example, suppose someone