Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 2/6)
Character Range: 6133992–6136734

holder of the assets of the partnership; and
 (b) to set the *tax cost of the assets of the partnership at an appropriate amount, taking into account the taxation treatment of partnerships.
Note: While the partnership is a subsidiary member of the group, it loses its separate tax identity (under the single entity rule in subsection 701‑1(1)). Therefore, in general, the assets of the partnership are treated as assets of the head company of the group and partnership cost setting interests in the partnership are ignored.
 (3) The provisions are:
 (a) section 701‑10 (about setting the tax cost of assets of an entity joining a group); and
 (b) Subdivision 705‑A; and
 (c) any other provision of this Act giving Subdivision 705‑A a modified effect in circumstances other than those covered by that Subdivision.
Note: An example of provisions covered by paragraph (c) are the provisions of Subdivision 705‑B giving Subdivision 705‑A a modified effect when a consolidated group is formed.
 (4) The third object of this Subdivision is to ensure that, where a partnership ceases to be a *subsidiary member of a *consolidated group, the provisions mentioned in subsection (5) operate:
 (a) as if the group's *partnership cost setting interests were the group's only assets relating to the partnership; and
 (b) to set the *tax cost of those interests at an appropriate amount, taking into account the fact that the group ceases to be the holder of the assets of the partnership.
 (5) The provisions are:
 (a) sections 701‑15 and 701‑50 (about setting the tax cost of membership interests in an entity that leaves the group); and
 (b) sections 701‑20 and 701‑45 (about the cost of assets consisting of certain liabilities owed by or to an entity that leaves the group); and
 (c) Division 711.

Partnership cost setting interests etc.

713‑210  Partnership cost setting interests
  A partnership cost setting interest in a partnership is the asset that is comprised of:
 (a) an interest in an asset of the partnership; or
 (b) an interest in the partnership that is not covered by paragraph (a);
but does not include an asset that is comprised of a *membership interest in the partnership.
Note 1: A partner may have more than one partnership cost setting interest that relates to an asset of the partnership (see section 106‑5).
Note 2: A partnership cost setting interest may relate to an asset of the partnership, but the asset of the partnership is not a partnership cost setting interest in the partnership.

713‑215  Terminating value for partnership cost setting interest
 (1) This section modifies the way in which the *terminating value of a *partnership cost setting interest in a partnership is worked out under section 705‑30.
 (2) For