51Treatment of shares in transferring body as at transition

#### 51 Treatment of shares in transferring body as at transition (1) In this section: > asset means an asset, as at the transition, of the transferring body. > issued shares means the issued shares, as at the transition, in the transferring body. > liability means a liability, as at the transition, of the transferring body. > market value means market value as at the transition. (2) This section has effect for the purposes of Part IIIA of the Tax Act if: (a) at the transition, the holding company holds all the issued shares; (b) assets (in this section called the pre‑CGT assets) were acquired by the transferring body before 20 September 1985; (c) the holding company, by written notice given to the Commissioner on or before the day on which the holding company lodges its return of income for the year of income in which the transition occurs, or within such further period as the Commissioner allows, nominates as pre‑CGT shares such of the issued shares as are specified in the notice; and (d) the number of shares nominated does not exceed the number calculated in accordance with the formula:  where: Shares is the number of issued shares. Net Value of Pre‑CGT Assets is the number of dollars in the market value of the pre‑CGT assets reduced by the number of dollars in the liabilities, to the extent that the liabilities are attributable to the pre‑CGT assets; and Net Value of Total Assets is the number of dollars in the market value of the assets reduced by the number of dollars in the liabilities. (3) The holding company shall be deemed to have acquired before 20 September 1985 the shares nominated under paragraph (2)(c). (4) The rest of the issued shares are post‑CGT shares for the purposes of subsection (5). (5) For the purpose of: (a) ascertaining whether a capital gain accrued to the holding company; or (b) ascertaining whether the holding company incurred a capital loss; in the event of a later disposal of a post‑CGT share by the holding company, the holding company shall be deemed to have acquired the share for a consideration equal to the amount calculated in accordance with the formula:  where: > Relevant Cost Bases is the sum of the respective amounts that would have been, for the purposes of Part IIIA of the Tax Act: (a) if the later disposal occurs within 12 months after the day on which the holding company acquired the share—the cost bases, or the reduced cost bases, as the case may be; or (b) in any other case—the indexed cost bases, or the reduced cost bases, as the case may be; to the transferring body of the assets (other than the pre‑CGT assets) if the body had disposed of those assets at the transition. > Attributable Liabilities is the amount of the liabilities, to the extent that they are attributable to the assets (other than the pre‑CGT assets); and > Post‑CGT Shares is the number of post‑CGT shares. (6) For the purposes of this section, to the extent that, apart from this subsection, they are not attributable to the assets, the liabilities shall be deemed to be attributable to a particular asset to the extent of the amount calculated in accordance with the formula:  where: > General liabilities is the amount of the liabilities, to the extent that, apart from this subsection, they are not attributable to the assets. > MV of particular asset is the number of dollars in the market value of the particular asset; and > MV of total assets is the number of dollars in the market value of the assets.