Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_6:p7
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 7/26)
Character Range: 191158–193914

(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 of subsection 705‑120(3) as mentioned in paragraph (a) of this subsection.

Interests treated as potentially subject to Subdivision 165‑CC

 (2) If this section applies:
 (a) a percentage, worked out under subsection (4), of each of the *membership interests in the leaving entity, that the *head company holds in the leaving entity just before the leaving time, is taken to have been owned by the head company at the changeover time mentioned in sections 165‑115C and 165‑115D; and
 (b) the head company is taken not to have owned at the changeover time any other part of any of those membership interests.

Note: The membership interests would include those that are actually held by subsidiary members of the group, but which are treated as those of the head company under the single entity rule.

How to work out the percentage

 (3) The percentage is the percentage of the *tax cost setting amount under this Subdivision for the *membership interests that is attributable to the entry Subdivision 165‑CC percentages of all of the Subdivision 165‑CC assets.

711‑65  Membership interests treated as having been acquired before 20 September 1985—simple case

When this section applies

 (1) This section applies if:
 (a) any of the assets (a pre‑CGT factor asset), that the *head company of the old group holds at the leaving time because the leaving entity is taken by subsection 701‑1(1) to be a part of the head company, has a *pre‑CGT factor under section 705‑125; and
 (a) section 711‑70 (about the multiple exit of *subsidiary members) does not apply.

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.

Note: Because of the deemed acquisition of the membership interests, this section is the only basis on which any of these interests can be pre‑CGT assets.

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 subsection (5).

Pre‑CGT proportion

 (5) Work out the leaving entity's pre‑CGT proportion in this way:

      Leaving entity's pre‑CGT proportion
           Step 1. For