Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:3_2:p2
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 2/2)
Character Range: 50878–53326

(b) are taken to be satisfied in relation to the subject membership interest; and
 (e) the subject membership interest is taken to have a *cost base and *reduced cost base equal to the subsection 705‑145(3) tax cost setting amount; and
 (f) the subject membership interest is taken to have a loss of pre‑CGT status adjustment amount equal to the notional section 705‑57 reduction amount.

Note: If the head company actually held any membership interests in the second entity, or if other entities becoming subsidiary members held membership interests in the second entity to which this subsection also applied, those membership interests would also be taken into account in working out the reduction under paragraph (a) and in applying paragraph (b).

Section 705‑57 not to apply where membership interests effectively acquired on normal market basis

 (6) If:
 (a) apart from this subsection, subsection 705‑57(6) would apply in accordance with this Subdivision to the revenue etc. assets of an entity (the subject entity) that becomes a *subsidiary member of the group at the formation time; and
 (b) at the formation time, the *head company of the group holds all of the *membership interests in the subject entity; and
 (c) subsection 705‑57(6) would apply because a circumstance covered by subsection 705‑57(4) (about loss of pre‑CGT status because Division 149 etc. applied) existed; and
 (d) the application of Division 149 of this Act, or the provision of the Income Tax Assessment Act 1936, as mentioned in paragraph 705‑57(4)(b) of this Act happened because the entity that became the *head company of the group (the potential head entity) *acquired all of the *membership interests in the other entity mentioned in that paragraph directly or indirectly from another entity (the vendor); and
 (e) at the time of the acquisition, the potential head entity did not control (for value shifting purposes) the vendor, and vice‑versa, and another entity did not control (for value shifting purposes) the potential head entity and the vendor; and
 (f) the acquisition, or each of the acquisitions, mentioned in subsection 705‑57(4) was a *same asset roll‑over or was one to which any of sections 160ZZN to 160ZZOC, 160ZZPA and 160ZZPJ of the Income Tax Assessment Act 1936 applied;
then subsection 705‑57(6) does not apply as mentioned in paragraph (a) of this subsection.

Part 2—Consequential CGT amendments

Income Tax Assessment Act 1997