Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 2/5)
Character Range: 5901803–5904472

been reduced as a result of the operation of section 165‑115ZD of this Act or the Income Tax (Transitional Provisions) Act 1997, then the reduced cost base of the membership interest that is to be used in subsection (1) of this section is reduced by the amount of that reduction.

Certain provisions not to apply after joining time
 (4) Also, if a provision mentioned in subsection (3), (3AA) or (3A) would, because of events that happened before the joining time, apply to a *CGT event or a *realisation event that happens after the joining time in relation to the *members' *membership interests in the joining entity, the provision does not so apply.

Reduction in cost base under subsection 110‑55(7) to be added back
 (5) If, in working out the *reduced cost base of the *membership interest for the purposes of subsection (1), a reduction has taken place under subsection 110‑55(7) (about certain distributions of pre‑acquisition profits), the reduced cost base is increased by the amount of that reduction.

Reduction in reduced cost base under subsection 165‑115ZA(3) to be added back
 (5A) If:
 (a) in working out the *reduced cost base of the *membership interest for the purposes of subsection (1), a reduction has taken place under subsection 165‑115ZA(3) (about alterations in ownership or control of loss companies); and
 (b) the reduction is to some extent attributable to so much of an amount that was taken into account both in working out the amount of the reduction and in working out:
 (i) the step 5 amount under section 705‑100; or
 (ia) the step 5A amount under section 705‑102; or
 (ii) the step 6 amount under section 705‑110; or
 (iii) the step 6A amount under section 705‑112;
the reduced cost base is, to the extent mentioned in paragraph (b), increased by:
 (c) if subparagraph (b)(i) or (ia) applies—the amount of that reduction; or
 (d) if subparagraph (b)(ii) or (iii) applies—the amount of that reduction multiplied by the *corporate tax rate.
 (5B) For the purposes of working out the *cost base or *reduced cost base of a *membership interest under subsection (1), if:
 (a) either or both of the following things happen after the joining time:
 (i) money is paid, or becomes required to be paid, in respect of *acquiring the membership interest;
 (ii) property is given, or becomes required to be given, in respect of acquiring the membership interest; and
 (b) because the thing happened after the joining time, it was not taken into account in working out the first element of the cost base or reduced cost base of the membership interest;
Note: This would be the case if the money was only to be paid etc. if a contingency happened