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Edited version of private ruling
Authorisation Number: 1011483500079
This edited version of your ruling will be published in the public Register of private binding rulings after 28 days from the issue date of the ruling. The attached private rulings fact sheet has more information.
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Ruling
Subject: Goodwill valuation
Question 1
Is the first element of the cost base and reduced cost base of the pre-CGT goodwill of the company appropriately determined for the purposes of subsection 149-75(2) of the Income Tax Assessment Act 1997 (ITAA 1997), by applying the residual value approach as at the end of the test day (the 'relevant time')?
Answer
Yes.
Question 2
For the purposes of determining the first element of the cost base and reduced cost base of the pre-CGT goodwill of the company in accordance with subsection 149-75(2) of the ITAA 1997 is a discounted cash flow valuation of the company at the relevant time the appropriate basis from which to determine the enterprise value for the residual value approach?
Answer
No.
Question 3
Is the first element of the cost base and reduced cost base of the pre-CGT goodwill of the company at the relevant time $x?
Answer
No.
What this ruling is about:
The full details of the scheme which are the subject of the ruling are contained in:
1. the application for a Private Binding Ruling,
2. appendices to the application for a Private Binding Ruling, and
3. the ATO valuer's risk assessment report on the taxpayer valuations.
The company engaged a valuer to carry out the necessary valuations.
The Commissioner engaged a valuer to review these valuations.
The company's valuer prepared a final report which was provided as an attachment to the application. The ATO valuer prepared an assessment of the valuation report.
The ATO provided a Private Binding Ruling on the valuation contained in the final report provided by the taxpayer based on the particular facts, which are relevant only to this taxpayer.
Relevant provisions:
Income Tax Assessment Act 1997 Section 149-10.
Income Tax Assessment Act 1997 Section 149-15.
Income Tax Assessment Act 1997 Subsection 149-15(1)
Income Tax Assessment Act 1997 Subsection 149-15(1)(a).
Income Tax Assessment Act 1997 Subsection 149-15(3).
Income Tax Assessment Act 1997 Section 149-50.
Income Tax Assessment Act 1997 Subsection 149-50(1).
Income Tax Assessment Act 1997 Section 149-55.
Income Tax Assessment Act 1997 Subsection 149-55(2)
Income Tax Assessment Act 1997 Paragraph 149-55(2)(b).
Income Tax Assessment Act 1997 Subsection 149-55(4).
Income Tax Assessment Act 1997 Section 149-60.
Income Tax Assessment Act 1997 Subsection 149-60(1).
Income Tax Assessment Act 1997 Section 149-70.
Income Tax Assessment Act 1997 Subsection 149-70(1).
Income Tax Assessment Act 1997 Subsection 149-70(2).
Income Tax Assessment Act 1997 Section 149-75.
Income Tax Assessment Act 1997 Subsection 149-75(2).
Income Tax Assessment Act 1997 Section 701-1
Income Tax Assessment Act 1997 Section 703-15
Income Tax Assessment Act 1997 Section 960-220
Income Tax Assessment Act 1997 Subsection 960-220(1).
Income Tax Assessment Act 1997 Section 960-225.
Income Tax Assessment Act 1997 Subsection 960-225(1).
Income Tax Assessment Act 1936 Section 160ZZS.
Income Tax Assessment Act 1936 Section 470.
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