Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_5:p9
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 5 (pt 9/10)
Character Range: 169405–172183

by the leaving entity—step 4 in working out allocable cost amount
711‑50 Adjustment to allocable cost amount to ensure effect of Subdivision 165‑CC not avoided—step 5 in working out allocable cost amount
711‑55 Tax cost setting amount for membership interests where multiple exit
711‑60 Membership interests treated as potentially subject to Subdivision 165‑CC (about unrealised losses)
711‑65 Membership interests treated as having been acquired before 20 September 1985—simple case
711‑70 Membership interests treated as having been acquired before 20 September 1985—multiple exit case

[This is the end of the Guide.]

Application and object of this Division

711‑5  Application and object of this Division

Application

 (1) This Division has effect:
 (a) for the head company core purposes set out in subsection 701‑1(2); and
 (b) for the entity core purposes set out in subsection 701‑1(3);
if an entity (the leaving entity) ceases to be a *subsidiary member of a *consolidated group (the old group) at a particular time (the leaving time). However, this Division does not have effect if the leaving entity ceases to be a subsidiary member where Subdivision 705‑C (about the old group joining another consolidated group) has effect.

Object

 (2) The object of this Division is, when entities cease to be *subsidiary members, to preserve the alignment of the *head company's costs for *membership interests in entities and their assets that is established when entities become subsidiary members.

Note: The reasons for preserving this alignment are set out in subsection 705‑10(3).

 (3) This is achieved by recognising the *head company's cost for those interests, just before the leaving time, as an amount equal to the cost of the leaving entity's assets at the leaving time reduced by the amount of its liabilities.

 (4) If multiple entities cease to be *subsidiary members at the same time, the cost of any *membership interests that one holds in another is treated in a similar way.

Tax cost setting amount for membership interests etc.

711‑10  Tax cost setting amount worked out under this Division

  If this Division applies, the amount of the following is worked out under the Division:
 (a) the *tax cost setting amount for the purposes of item 2 in the table in section 701‑60 for each *membership interest in the leaving entity that *members of the old group held; and
 (b) if 2 or more entities cease to be *subsidiary members of the group at the same time because of an event happening in relation to one of them—the tax cost setting amount for the purposes of item 4 in the table in that section for each membership interest that the leaving entity holds in any of the other entities.

711‑15  Tax cost setting amount where no multiple exit

 (1)