Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5:p8
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5 (pt 8/13)
Character Range: 6105042–6107745

tax cost setting amount for membership interests in those other entities.

Tax cost setting amount for membership interests acquired by head company
 (4) Then work out the *tax cost setting amount mentioned in paragraph 711‑10(a) for the *membership interests held by the *head company in the same way as under section 711‑15.
Note: In doing so, tax cost setting amounts worked out under subsection (3) of this section for membership interests held by the leaving entity in other entities will be taken into account in working out the allocable cost amount for the leaving entity. Those tax cost setting amounts will in turn have been affected by any other tax cost setting amounts worked out under subsection (3) for membership interests in other entities.

Tax cost setting amount for membership interests acquired by leaving entity
 (5) The *tax cost setting amount mentioned in paragraph 711‑10(b) for *membership interests of which the leaving entity becomes the holder will be one of the tax cost setting amounts worked out under subsection (3) of this section.
Example: Companies A, B, C, D and E are all subsidiary members that leave the old group at the same time. Just before the leaving time, company A owned shares in company B and company C, and company B owned shares in companies D and E.
 First, work out company A's tax cost setting amount for membership interests in company C and company B's tax cost setting amount for membership interests in companies D and E by applying section 711‑15 in accordance with paragraph (3)(a) above.
 Next, work out company A's tax cost setting amount for membership interests in company B under that section as so applied, taking into account the tax cost setting amount just worked out for company B's assets consisting of shares in companies D and E.
 Finally, work out the head company's tax cost setting amount for membership interests in company A under section 711‑15 in accordance with subsection (4) above, taking into account the tax cost setting amounts worked out for companies B and C.

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

When this section applies
 (1) This section applies unless:
 (a) Subdivision 705‑C (about one group joining another consolidated group) applies in relation to the old group; and
 (b) the leaving entity is a *subsidiary member of the old group.
 (1A) To avoid doubt, this section applies regardless of whether the leaving entity ceases to be a *subsidiary member of the old group at the leaving time because another entity also ceases to be a subsidiary member of the old group at the leaving time.

Interests treated as if purchased before 20 September 1985
 (2) If