Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 9/13)
Character Range: 6107521–6110200

a *subsidiary member of the old group at the leaving time because another entity also ceases to be a subsidiary member of the old group at the leaving time.

Interests treated as if purchased before 20 September 1985
 (2) If this section applies, a number of the *membership interests in the leaving entity that *members of the old group hold are taken to have been acquired before 20 September 1985.

Number of pre‑CGT membership interests
 (3) The number is the result of the formula in subsection (4), rounded down to:
 (a) the nearest whole number if the result is not already a whole number; or
 (b) zero if the result is a number more than zero but less than one.

Formula
 (4) The formula is:
where:
leaving entity's pre‑CGT proportion is the amount worked out under section 705‑125.

Dealing with classes of membership interests
 (6) If there are 2 or more classes of *membership interests in the leaving entity, this section operates separately in relation to each class as if the interests in that class were all the interests in the entity.

Allocation of the number to particular membership interests
 (7) The *head company must choose which particular *membership interests comprise the number worked out under subsection (2).

Modification if leaving entity is a trust
 (8) If the leaving entity is a trust, a *membership interest in it is not taken into account under this section unless the membership interest is either a unit or an interest in the trust.

711‑70  Additional integrity rule if membership interests treated as having been acquired before 20 September 1985 under section 711‑65—application of Division 149 to head company
 (1) This section applies if:
 (a) the leaving entity held assets at the time it became a *subsidiary member of the old group (disregarding subsection 701‑1(1) (the single entity rule)); and
 (b) some or all of the assets:
 (i) stopped being *pre‑CGT assets under Division 149 at a time (the Division 149 time) when the *head company of the group held them under subsection 701‑1(1) (the single entity rule); or
 (ii) would have stopped being pre‑CGT assets under Division 149 at a time (also the Division 149 time) when the head company of the group held them under subsection 701‑1(1) (the single entity rule) if they had been pre‑CGT assets just before that time; and
 (c) the leaving entity was a subsidiary member of the group at that time.
 (2) The *pre‑CGT proportion of the leaving entity at the leaving time is taken to be nil.
 (3) Adjust the old group's *allocable cost amount for the leaving entity as follows:
 (a) if the amount under subsection (4) exceeds the amount under subsection (6)—increase the allocable