Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p18
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 18/59)
Character Range: 2577267–2580096

or new debt owed, under the *arrangement, by a member of a *wholly‑owned group to another member (the recipient) of the group, if:
 (a) the acquiring entity is a member of the group; and
 (b) the cost base of an original interest was transferred or allocated under section 124‑782 because the original interest holder is a *significant stakeholder or a *common stakeholder for the arrangement.

Allocation of cost base
 (2) The first element of the *cost base of the equity or debt for the recipient is that part of the cost base of the original interest transferred or allocated under section 124‑782 as:
 (a) may be reasonably allocated to the equity or debt; and
 (b) is not more than the *market value of the equity or debt just after the *arrangement was completed.

124‑784A  When arrangement is a restructure
 (1) This section applies in relation to a single *arrangement if:
 (a) the replacement entity for the arrangement knows, or could reasonably be expected to know:
 (i) that a roll‑over under section 124‑780 or 124‑781 has been, or will be, obtained in relation to the arrangement; and
 (ii) that there is a *common stakeholder for the arrangement (disregarding subsections 124‑783(4) and (5)); and
 (b) subsection (2) is satisfied for the arrangement.
Note: If this section applies, the first element of the cost base and reduced cost base of interests in the original entity acquired under the arrangement is worked out under section 124‑784B.
 (2) This subsection is satisfied for the *arrangement if the result of step 2 is more than 80% of the result of step 3.

      Method statement
           Step 1. Add up the *market value just after the *arrangement was completed (the completion time) of all of the replacement interests issued by the replacement entity under the arrangement in exchange for the following interests (the qualifying interests):

                (a) original interests in the original entity;
                (b) any interests issued by the original entity to an acquiring entity under the arrangement in respect of other original interests in the original entity cancelled under the arrangement.

           Step 2. Add to the result of step 1 the *market value at the completion time of all of the replacement interests issued by the replacement entity under any earlier arrangement for which this section applied in exchange for qualifying interests in the original entity.
           Step 3. Add up the *market value at the completion time of all of the:

                (a) if the replacement entity is a company—*shares *on issue by the replacement entity; and
                (b) if the replacement entity is a company—options, rights and similar interests issued by the replacement entity that give the holder an entitlement to acquire a share in the replacement entity at