Document ID: chunk:federal_register_of_legislation:C2025C00014:schedule:2h:p15
Version: federal_register_of_legislation:C2025C00014
Segment Type: schedule
Provision Reference: sch 2H (pt 15/165)
Character Range: 2432922–2435669

in the demutualising entity by disposing of membership rights in another mutual entity, is the market value, as determined by a qualified valuer, of the other entity at the time immediately before the disposer disposed of membership rights in the other entity. However, in making the determination the valuer is to disregard the franking surplus of the other entity at that time.

Indexation of amount mentioned in subsection (2)
 (3) If the indexation factor (see section 326‑235) of the amount worked out under subsection (2) is more than one, that amount is taken to be replaced by that amount as indexed under Subdivision 326‑M.

326‑125  Undeducted membership costs
 (1) For the purposes of this Subdivision, the undeducted membership costs, when the expression is used in relation to a disposer who did not acquire membership rights in the demutualising entity by the disposal of membership rights in another mutual entity, are the sum of the undeducted amounts of the costs that were incurred by the disposer in acquiring and maintaining membership in the demutualising entity less any distributions that:
 (a) were made by the demutualising entity to the disposer before any shares in the demutualised entity were issued; and
 (b) were not included in the disposer's assessable income of any year of income.
 (2) For the purposes of this Subdivision, the undeducted membership costs, when the expression is used in relation to a disposer who acquired membership rights in the demutualising entity by the disposal of membership rights in another mutual entity, are:
 (a) if the disposer was a pre‑CGT member—the sum of the undeducted amounts of the costs that were incurred by the disposer in maintaining membership in the demutualising entity less any distributions that:
 (i) were made by the demutualising entity to the disposer before any shares in the demutualised entity were issued; and
 (ii) were not included in the disposer's assessable income of any year of income; or
 (b) if the disposer is a post‑CGT member, the sum of:
 (i) the undeducted amounts of the costs that were incurred by the disposer in acquiring and maintaining membership in the other entity; and
 (ii) the undeducted amounts of the costs that were incurred by the disposer in maintaining membership in the demutualising entity;
  less any distributions that:
 (iii) were made by the demutualising entity or the other entity to the disposer before any shares in the demutualised entity were issued; and
 (iv) were not included in the disposer's assessable income of any year of income.
 (3) If at any time 2 or more persons were joint members of a mutual entity, any costs incurred by any one or more of them in acquiring or maintaining the joint membership are