Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_6:p6
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 6/26)
Character Range: 188724–191397

amounts worked out under subsection (3) of this section for membership interests held by the leaving entity in other entities will be taken into account in working out the allocable cost amount for the leaving entity. Those tax cost setting amounts will in turn have been affected by any other tax cost setting amounts worked out under subsection (3) for membership interests in other entities.

Tax cost setting amount for membership interests acquired by leaving entity

 (5) The *tax cost setting amount mentioned in paragraph 711‑10(b) for *membership interests of which the leaving entity becomes the holder will be one of the tax cost setting amounts worked out under subsection (3) of this section.

Example: Companies A, B, C, D and E are all subsidiary members that leave the old group at the same time. Just before the leaving time, company A owned shares in company B and company C, and company B owned shares in companies D and E.

 First, work out company A's tax cost setting amount for membership interests in company C and company B's tax cost setting amount for membership interests in companies D and E by applying section 711‑15 in accordance with paragraph (3)(a) above.

 Next, work out company A's tax cost setting amount for membership interests in company B under that section as so applied, taking into account the tax cost setting amount just worked out for company B's assets consisting of shares in companies D and E.

 Finally, work out the head company's tax cost setting amount for membership interests in company A under section 711‑15 in accordance with subsection (4) above, taking into account the tax cost setting amounts worked out for companies B and C.

711‑60  Membership interests treated as potentially subject to Subdivision 165‑CC (about unrealised losses)

When this section applies

 (1) This section applies if, for any of the assets that are those of the *head company of the old group at the leaving time because the leaving entity is taken by subsection 701‑1(1) to be a part of the head company:
 (a) a percentage (the entry Subdivision 165‑CC percentage) of the asset (a Subdivision 165‑CC asset) was taken by subsection 705‑120(3) to have been owned by the head company at the changeover time; and
 (b) assuming the head company *disposed of the asset at the leaving time for an amount that would cause it to:
 (i) make a *capital loss; or
 (ii) be entitled to a deduction; or
 (iii) make a *trading stock loss;
  it would be prevented by Subdivision 165‑CC from taking into account or deducting some or all of that loss or deduction; and
 (c) Subdivision 165‑CC would have that effect solely because of the operation