Question: subdiv 768g case study acme beneficially owns 100 of...
Subdiv 768-G - Case Study
Acme beneficially owns 100% of the shares in HK Co, a Hong Kong resident company. Acme acquired the shares for $5 million in August 2012. Half the shares are held by Acme directly.
The assets of HK Co are a shirt factory business with a book value of $2 million and a market value of $4 million, a block of residential apartments with a book value of $3 million and a market value of $4 million, cash of $500,000, and shares in an Australian listed public company with a book and market value of $1,500,000.
The assets of the shirt factory business are trading stock (book value $1,000,000, market value $2,000,000); plant (book value of $1,000,000, market value of $1,000,000) and internally generated goodwill with a book value of nil and a market value of $1 million).
Consider the application of Div 768 to the following disposals by Acme Ltd, a resident company:
1. A disposal by Acme and the Unit Trust of the entire shareholding at market value in July 2018.
2. A disposal by Acme and the Unit Trust of the entire shareholding at market value in September 2017.
3. A disposal by Acme of a 40% shareholding at market value in September 2015 and the disposal of the balance of 5% in January 2018.
In answering the above, assume that the book values have been the book values for the last 3 years.