Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-80 - ROLL-OVERS APPLYING TO ASSETS GENERALLY  

Division 615 - Roll-overs for business restructures  

Subdivision 615-D - Consequences for the interposed company  

SECTION 615-65   Consequences for the interposed company  

615-65(1)  
This section applies if the interposed company so chooses under subsection 615-30(1) .

615-65(2)  
A number of the *shares or units that the interposed company owns in the original entity (immediately after the completion time) are taken to have been *acquired before 20 September 1985 if any of the original entity ' s assets as at the completion time were acquired by it before that day.

Note:

Generally, a capital gain or capital loss you make from a CGT asset that you acquired before 20 September 1985 can be disregarded: see Division 104 .

615-65(3)  
That number (worked out as at the completion time) is the greatest possible whole number that (when expressed as a percentage of all the *shares or units) does not exceed:


(a) the *market value of the original entity ' s assets that it *acquired before 20 September 1985; less


(b) its liabilities (if any) in respect of those assets;

expressed as a percentage of the market value of all the original entity ' s assets less all of its liabilities.

615-65(4)  
The first element of the *cost base of the interposed company ' s *shares or units in the original entity that are not taken to have been *acquired before 20 September 1985 is:


(a) the total of the cost bases (as at the completion time) of the original entity ' s assets that it acquired on or after that day; less


(b) its liabilities (if any) in respect of those assets.

The first element of the *reduced cost base of those shares or units is worked out similarly.

615-65(5)  
A liability of the original entity that is not a liability in respect of a specific asset or assets of the original entity is taken to be a liability in respect of all the assets of the original entity.

Note:

An example is a bank overdraft.

615-65(6)  
If a liability is in respect of 2 or more assets, the proportion of the liability that is in respect of any one of those assets is equal to:


The *market value of the asset
Total market value of all the assets that the liability is in respect of


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