INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-3 - CAPITAL GAINS AND LOSSES: SPECIAL TOPICS  

Division 125 - Demerger relief  

Subdivision 125-C - Consequences for members of demerger group  

Operative provisions

SECTION 125-170   Reduced cost base reduction if demerger asset subject to roll-over  

125-170(1)  
The *reduced cost base of a *CGT asset is reduced if:


(a) the *market value of the asset is reduced because of a *demerger; and


(b) after the demerger the asset is *acquired by an entity from another entity (the transferor ) in a situation where the transferor obtained a roll-over for the disposal; and


(c) the reduction occurred when the transferor owned the asset.

125-170(2)  
The *reduced cost base of the asset as determined under the roll-over is reduced just after the roll-over to the extent of the reduction in *market value caused by the *demerger.

Note:

The rules in section 125-165 and this section deal with any value shift that might occur under the demerger and avoid the need for the general value shifting regime to apply.

125-170(3)  
If the *reduced cost base of a *CGT asset is reduced under this section because of a *demerger, no other adjustment can be made under this Act to that reduced cost base because of something that happens under the demerger.


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