Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p1
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 1/16)
Character Range: 7556846–7560167

2                                                      item 1 does not apply                                                                                                              the product of:                                                                                                          the product of:
                                                                                                                                                                                          (a) the sum of the *market values of all the assets of the other entity that are *taxable Australian real property; and  (a) the sum of the market values of all the assets of the other entity that are not taxable Australian real property; and
                                                                                                                                                                                          (b) the first entity's *direct participation interest in the other entity                                                (b) the first entity's direct participation interest in the other entity

Note 1: For the purposes of item 2 of the table, it is necessary to work out the market value of any TARP assets and non‑TARP assets in relation to any membership interests held by the other entity before working out the value of the TARP asset and non‑TARP asset held by the first entity.
Note 2: The market value of an asset of the other entity that is not taxable Australian real property, and is duplicated within the other entity's corporate group, could be disregarded (see section 855‑32).
 (4A) For the purposes of working out the *total participation interests held by the holding entity and its *associates under item 1 of the table in subsection (4), take into account:
 (a) a particular *direct participation interest; or
 (b) a particular *indirect participation interest;
held in the other entity only once if it would otherwise be counted more than once because the entity holding it is an associate of the holding entity.
 (5) For the purposes of this section, disregard the *market value of any asset acquired by the test entity, or by any other entity, if the *acquisition was done for a purpose (other than an incidental purpose) that included ensuring that a *membership interest in any entity would not pass the principal asset test in this section.

855‑32  Disregard market value of duplicated non‑TARP assets
 (1) The purpose of this section is to prevent double counting of the *market value of the assets of a corporate group that:
 (a) are not *taxable Australian real property; and
 (b) are created under *arrangements under which corresponding liabilities are created in other members of the group.
 (2) For the purposes of subsections 855‑30(2) and (4), subsection (4) of this section applies to an asset that is not *taxable Australian real property if:
 (a) the parties to an *arrangement included the 2 entities referred to in subsection (3); and
 (b) an effect of the arrangement was to create, before the *CGT event happened:
 (i) the asset as an asset of one of those 2 parties; and
 (ii) a corresponding liability of the other (the other party).
 (3) The 2 entities are either:
 (a) the first entity and the other entity (see subsection 855‑30(3)), if