New Business Tax System (Integrity and Other Measures) Act 1999 (Incorporating amendments up to Act No. 78 of 2001) (169 of 1999)

Schedule 4   Transfers of assets within company groups

Income Tax Assessment Act 1997

12   Subsection 126-85(3) (method statement, steps 2 and 3)

Repeal the steps, substitute:

Step 2. Work out (disregarding this Subdivision):

(a) the sum of the *capital gains the subsidiary would make on the *disposal of its CGT roll-over assets to the holding company; and

(b) the sum of the *capital losses it would make except for Subdivision 170-D on the disposal of its *CGT assets to the holding company;

in the course of the liquidation assuming the *capital proceeds were the assets' market values at the time of the disposal.

Step 3. If, after subtracting the sum of the *capital losses from the sum of the *capital gains, there is an overall capital gain from step 1 and an overall capital gain from step 2, then continue. Otherwise there is no adjustment.