• Consolidations

    CGT event

    Time of event

    Capital gain

    Capital loss

    L1

    Reduction under section 705-57 in tax cost setting amount of assets of entity becoming subsidiary member of consolidated group or Multiple Entry Consolidated (MEC) group

    just after entity becomes subsidiary member

    no capital gain

    amount of reduction

    L2

    Amount remaining after step 3A (of the table in section 705-60) of joining ‘allocable cost amount’ is negative

    just after entity becomes subsidiary member

    amount remaining

    no capital loss

    L3

    Tax cost setting amounts for retained cost base assets exceed joining ‘allocable cost amount’

    just after entity becomes subsidiary member

    amount of excess

    no capital loss

    L4

    No reset cost base assets against which to apply excess of net ‘allocable cost amount’ on joining

    just after entity becomes subsidiary member

    no capital gain

    amount of excess

    L5

    Amount remaining after step 4 (of the table in section 711-20) of leaving ‘allocable cost amount’ is negative

    when entity ceases to be subsidiary member

    amount remaining

    no capital loss

    L6

    Error in calculation of tax cost setting amount for joining entity’s assets

    start of the income year when the Commissioner becomes aware of the errors

    the net overstated amount resulting from the errors, or a portion of that amount

    the net understated amount resulting from the errors, or a portion of that amount

    L8

    Reduction in tax cost setting amount for reset cost base assets on joining cannot be allocated

    just after entity becomes a subsidiary member

    no capital gain

    amount of reduction that cannot be allocated

      Last modified: 09 May 2016QC 17157