Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:3_2:p6
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 6/6)
Character Range: 33481–34735

of the first entity's membership interests in the second entity is increased by the first entity's interest in the loss subtraction amount (see subsection (3)).

First entity's interest in loss subtraction amount
 (3) The first entity's interest in the loss subtraction amount is worked out using the formula:

705‑165  Working out pre‑CGT factors where subsidiary members have membership interests in other subsidiary members

Object
 (1) The object of this section is to ensure that where, on becoming *subsidiary members, entities hold *membership interests in other subsidiary members, the pre‑CGT status of membership interests held by the *head company, and not the pre‑CGT status of membership interests held by other entities, is used to work out the *pre‑CGT factor under section 705‑125 for assets of the other subsidiary members.

Pre‑CGT factor to be worked out from top down
 (2) If, on becoming *subsidiary members, entities hold *membership interests in any other entities that become subsidiary members, the *pre‑CGT factor for the assets of entities holding membership interests must be worked out before the pre‑CGT factor for the assets of the entities in which the membership interests are held.
[The next Division is Division 707.]