Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_1:p2
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 2/13)
Character Range: 104305–107025

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 *same business 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 same business 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 same business 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 same business 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 supplementing and modifying the application of Subdivision 165‑CC to take account of how the rest of this Part treats *members of a *consolidated group (in particular the provisions about entities becoming or ceasing to be members).

[The next section is section 715‑25.]

Effect on Subdivision 165‑CC of a company becoming a member of a consolidated group

715‑25  Subdivision 165‑CC stops applying to