Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_1:p4
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 1 (pt 4/13)
Character Range: 109233–111975

amounts of it are applied for various purposes.

[The next section is section 715‑50.]

165‑CC tagged assets that affect tax cost setting amounts

715‑50  Step 1 amount is reduced if membership interest in subsidiary member is 165‑CC tagged asset and same business test is failed

 (1) The amount taken into account under subsection 705‑65(1) (about the cost of membership interests in the joining entity) for a *membership interest that a *member of the joined group holds in the joining entity at the joining time is reduced if:
 (a) apart from this section, the amount would be the membership interest's *reduced cost base (if appropriate, as modified by a later provision of section 705‑65); and
 (b) the membership interest is at that time a *165‑CC tagged asset of that member, and that member owned it at the *changeover time for that member; and
 (c) that member's *final RUNL just before the joining time was greater than nil; and
 (d) that member does not satisfy the *same business test for:
 (i) the period (the same business test period) consisting of the *head company's *trial year; and
 (ii) the time (the test time) just before the *changeover time.

 (2) If at the joining time that *member holds:
 (a) 2 or *more membership interests in the joining entity; or
 (b) at least one membership interest in the joining entity, and at least one membership interest in another member of the joined group;
this section applies to each such membership interest in whichever order that member determines.

Amount of reduction

 (3) The amount taken into account under subsection 705‑65(1) is reduced to the *membership interest's *market value at the joining time.

 (4) However, if that member's *final RUNL (as reduced by any previous reductions under this section) is less than the difference between:
 (a) the *reduced cost base referred to in paragraph (1)(a); and
 (b) the *market value referred to in subsection (3);
the amount taken into account under subsection 705‑65(1) is instead reduced by that final RUNL.

 (5) That *final RUNL is reduced by the amount of the reduction under subsection (3) or (4).

Rights and options to acquire membership interests

 (6) Subsection 705‑65(6) (which treats rights and options as membership interests) also applies for the purposes of this section.

715‑55  Step 2 amount is affected if liability of subsidiary member is 165‑CC tagged asset of another group member and same business test is failed

 (1) The amount (the comparison amount) applicable under the table in subsection 705‑75(2) (about reduction of the step 2 amount) for an accounting liability of the joining entity that is owed to a *member of the joined group at the joining time is reduced if:
 (a) apart from this