Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 4/4)
Character Range: 6084345–6085823

leaving entity is a trust—for each membership interest in the trust that satisfies these conditions:
 (i) it is neither a unit nor an interest in the trust;
 (ii) the member of the old group that held it began to hold it only because money or property was settled on the trust;
 (iii) it either had no *cost base or it had a cost base of nil;
  reducing the result under paragraph (c) to nil.
Note: Compare the treatment of such interests when an entity joins a group: see section 713‑20.

Non‑membership equity interests
 (2) For the purposes of this section, if at the leaving time a *member of the old group holds a *non‑membership equity interest in the leaving entity, that non‑membership equity interest is treated as if:
 (a) it were a *membership interest in the leaving entity; and
 (b) it were of a different class than any other membership interest in the leaving entity.

711‑20  What is the old group's allocable cost amount for the leaving entity?
 (1) Work out the old group's allocable cost amount for the leaving entity in this way:

Working out the old group's allocable cost amount for the leaving entity
Step                                                                      What the step requires                                                                                                                                                                                                                                               Purpose of the step