Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:3_2:p3
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 3/6)
Character Range: 26038–28745

members of the group. If an entity ceases to be a member, section 701‑15 and Division 711 set the tax cost of membership interests in the entity at that time.

Value shifting etc. provisions not to apply to later CGT events involving membership interests
 (4) However, despite subsection (3), subsection 705‑65(4) (which prevents the later operation of value shifting etc. provisions) still applies to the *membership interests.

Rights and options to acquire membership interests
 (5) For the purposes of this section, if, on becoming a *subsidiary member, an entity holds a right or option (including a contingent right or option), created or issued by another entity that becomes a subsidiary member at the same time, to acquire a *membership interest in that other entity, that right or option is treated as if it were a membership interest in that other entity.

705‑150  Adjustment to result of step 3 in working out allocable cost amount where pre‑formation time roll‑over from head company to member of wholly‑owned group

Object
 (1) The object of this section is to ensure that, in working out the group's *allocable cost amount for certain entities that become *subsidiary members of the group at the formation time, an adjustment is made to take account of roll‑overs under Subdivision 126‑B or section 160ZZO of the Income Tax Assessment Act 1936 before the formation time.

When section applies
 (2) This section applies if:
 (a) before the formation time, there was a roll‑over under Subdivision 126‑B or section 160ZZO of the Income Tax Assessment Act 1936 in relation to a *CGT event (the head company roll‑over event) that happened in relation to an asset (the head company roll‑over asset), where:
 (i) an entity (the head company roll‑over recipient) that becomes a *subsidiary member of the group was the recipient company in relation to the roll‑over; and
 (ii) the originating company in relation to that roll‑over was the entity that becomes the *head company of the group; and
 (b) between the roll‑over and the formation time, no other CGT event happened in relation to the head company roll‑over asset:
 (i) for which there was another roll‑over satisfying the requirements of paragraph (a); or
 (ii) for which there was not a roll‑over under Subdivision 126‑B or section 160ZZO of the Income Tax Assessment Act 1936; and
 (c) the head company roll‑over asset is not a *pre‑CGT asset at the formation time; and
 (d) the sum of the *cost bases of all of the *head company's *CGT assets just before the head company roll‑over event exceeded or was less than the sum of the cost bases of all of the head company's CGT assets just after the head company roll‑over event (the excess or