Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_8:p9
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 8 (pt 9/14)
Character Range: 501313–503867

shares that has shifted into its class B shares and the class B shares of its associate.

 (2) The reduction occurs when the *share value shift happens.

140‑65  Cost base adjustment for shares increasing in value

 (1) The fourth element of the *cost base and *reduced cost base of each *increased value share owned by an entity (and *acquired on or after 20 September 1985) that has *materially increased in value includes this amount:

 • the gain referable to the decrease in value of *decreased value shares owned by other entities: see section 140‑70;

plus:

 • the gain referable to the decrease in value of *decreased value shares owned by the entity: see section 140‑75.

  The amount is included when the *share value shift happens.

Example: To continue the example in sections 140‑55 and 140‑60, the controller's 200 class B shares have materially increased in value. The cost base and reduced cost base of each one is increased.

 The cost base and reduced cost base of each one before the gain in value is $20. Because these shares all had the same market value before the share value shift ($100), they all increased in value by the same amount ($50) and they all have the same cost base ($20), their cost base and reduced cost base adjustment can be calculated as an aggregate.

 (1A) However, the amount is included only to the extent that it is reflected in the market value of the *increased value share at the time of a later *CGT event. The amount is so included even if it is not reflected in the state or nature of the share at that time.

 (2) There is a material increase in the value of an *increased value share in 2 situations.

 (3) The first is if the sum of:

 (a) any *discount given in relation to the share (expressed as a percentage of its market value just before it was issued) in a *share value shift that occurs under the scheme; and

 (b) any percentage increases in its market value because of share value shifts that occur under the *scheme;

is at least 5%.

 (4) The second is if the sum of:

 (a) any *discounts given in relation to all shares in *share value shifts that occur under the scheme; and

 (b) any increases in the market value of all shares whose market value increased because of *share value shifts that occur under the scheme;

is at least $100,000.

140‑70  Gain referable to fall in value of shares owned by others

 (1) The gain referable to the decrease in value of *decreased value shares owned by other entities is the smaller of these 2 amounts.

 (2) The first