Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p21
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 21/30)
Character Range: 6197257–6200046

test time—a notional event of that kind happening at the test time; or
 (b) otherwise—a notional event of that kind that happens at the test time, and that the company determines under paragraph 165‑115BB(1)(b) to have happened later than each event that actually happened at that time.
Note: This Subdivision reduces a company's final RUNL as amounts of it are applied for various purposes.

165‑CC tagged assets that affect tax cost setting amounts

715‑50  Step 1 amount is reduced if membership interest in subsidiary member is 165‑CC tagged asset and business continuity test is failed
 (1) The amount taken into account under subsection 705‑65(1) (about the cost of membership interests in the joining entity) for a *membership interest that a *member of the joined group holds in the joining entity at the joining time is reduced if:
 (a) apart from this section, the amount would be the membership interest's *reduced cost base (if appropriate, as modified by a later provision of section 705‑65); and
 (b) the membership interest is at that time a *165‑CC tagged asset of that member, and that member owned it at the *changeover time for that member; and
 (c) that member's *final RUNL just before the joining time was greater than nil; and
 (d) that member does not satisfy the *business continuity test for:
 (i) the period (the business continuity test period) consisting of the *head company's *trial year; and
 (ii) the time (the test time) just before the *changeover time.
 (2) If at the joining time that *member holds:
 (a) 2 or *more membership interests in the joining entity; or
 (b) at least one membership interest in the joining entity, and at least one membership interest in another member of the joined group;
this section applies to each such membership interest in whichever order that member determines.

Amount of reduction
 (3) The amount taken into account under subsection 705‑65(1) is reduced to the *membership interest's *market value at the joining time.
 (4) However, if that member's *final RUNL (as reduced by any previous reductions under this section) is less than the difference between:
 (a) the *reduced cost base referred to in paragraph (1)(a); and
 (b) the *market value referred to in subsection (3);
the amount taken into account under subsection 705‑65(1) is instead reduced by that final RUNL.
 (5) That *final RUNL is reduced by the amount of the reduction under subsection (3) or (4).

Non‑membership equity interests
 (6) Subsection 705‑65(6) (which treats *non‑membership equity interests as *membership interests) also applies for the purposes of this section.

715‑55  Step 2 amount is affected if liability of subsidiary member is 165‑CC tagged asset of another group member and business continuity test is failed
 (1) The amount