Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) CGT event J1 happens if:
(a) there is a roll - over under Subdivision 126 - B for a * CGT event (the roll - over event ) that happens in relation to a * CGT asset (the roll - over asset ) involving 2 companies that are members of the same * wholly - owned group; and
(b) the company (the recipient company ) that owns the roll - over asset just after the roll - over stops being a 100% subsidiary of a company in the group in the circumstances set out in subsection (2) or (3); and
(c) at the time of the roll - over, the recipient company was a * 100% subsidiary of:
(i) the other company involved in the roll - over event (the originating company ); or
(ii) another member of the same * wholly - owned group.
Note: If the roll - over was under former section 160ZZO of the Income Tax Assessment Act 1936 , CGT event J1 does not happen if there would not have been a deemed disposal and re - acquisition under that Act: see section 104 - 175 of the Income Tax (Transitional Provisions) Act 1997 .
(2) This condition applies if there has been only one roll - over within the * wholly - owned group under Subdivision 126 - B involving the roll - over asset.
The recipient company must stop, at a time (the break - up time ) when it still owns the roll - over asset, being a * 100% subsidiary of a member of the group (the ultimate holding company ) that is not a 100% subsidiary of any other member of the group at the time of the roll - over event.
(3) This condition applies if the roll - over event was the last in a series of * CGT events involving the roll - over asset and there was a roll - over within the * wholly - owned group under Subdivision 126 - B for all the events.
The recipient company must stop, at a time (also the break - up time ) when it still owns the roll - over asset, being a * 100% subsidiary of another member of the group (also the ultimate holding company ) that was not a 100% subsidiary of any other member of the group at the time of the first of the events.
(4) The time of the event is the break - up time.
(5) The recipient company makes a capital gain if the roll - over asset's * market value (at the break - up time) is more than its * cost base. It makes a capital loss if that market value is less than its * reduced cost base.
Exceptions
(6) CGT event J1 does not happen if the conditions in section 104 - 180 or 104 - 182 are satisfied.
(7) A * capital gain or * capital loss the recipient company makes is disregarded if the roll - over asset is taken to have been * acquired by it before 20 September 1985 under Subdivision 126 - B (except where the roll - over asset has stopped being a * pre - CGT asset, for example, because of Division 149).
Note: CGT event J1 does not happen to a demerged entity or a member of a demerger group if CGT event A1 or C2 happens to a demerging entity under a demerger: see section 125 - 160.
Acquisition rule
(8) The recipient company is taken to have * acquired the roll - over asset at the break - up time.
Cost base adjustment
(9) The first element of the recipient company's * cost base and * reduced cost base of the roll - over asset (just after the break - up time) is its * market value (at the break - up time).