Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_6:p1
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 1/26)
Character Range: 176619–179274

6                                                                         If the amount remaining after step 5 is positive, it is the old group's allocable cost amount for the leaving entity. Otherwise the old group's allocable cost amount is nil.

Note: If the amount remaining after step 5 is negative, the head company is taken to have made a capital gain equal to the amount.

Recalculation in order to work out amount of capital loss

 (2) If it is necessary to work out whether the *head company makes a capital loss for a *CGT event that happens at or after the leaving time in relation to any of the *membership interests, the old group's allocable cost amount for the leaving entity is instead worked out as if the head company's *terminating value for any asset covered by subsection 705‑30(4) (as it applies for the purposes of section 711‑30) were instead equal to the asset's *reduced cost base just before the leaving time.

711‑25  Terminating values of assets that the leaving entity takes with it—step 1 in working out allocable cost amount

 (1) For the purposes of step 1 in the table in subsection 711‑20(1), the step 1 amount is worked out by adding up the *head company's *terminating values of all the assets that the head company holds at the leaving time because the leaving entity is taken by subsection 701‑1(1) (the single entity rule) to be a part of the head company.

Goodwill

 (2) If loss of control and ownership of the leaving entity by the *head company would decrease the *market value of the goodwill associated with assets or businesses of the old group (other than those of the leaving entity), the head company's *cost base of the asset consisting of goodwill that it holds at the leaving time because of its control and ownership of the leaving entity is added to the step 1 amount.

Note: If the asset arose because the head company acquired control and ownership of a joining entity, subsection 705‑35(3) would have applied in relation to the joining entity. The asset could also have arisen e.g. because the head company acquired a business from an entity without acquiring the entity.

711‑30  What is the head company's terminating value for an asset?

 (1) The *head company's terminating value for an asset that it holds at the leaving time because the leaving entity is taken by subsection 701‑1(1) to be a part of the head company is worked out as follows.

 (2) The amount is worked out by applying section 705‑30 in a corresponding way to the way that section applies to work out the *terminating value for an asset that a joining entity holds at the joining time.

711‑35  If head company becomes