Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p18
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 18/19)
Character Range: 5878408–5881121

from itself as a result of 2 or more acquisitions, all of which took place after 16 May 2002; and
 (b) the membership interest stopped being a *pre‑CGT asset because of the acquisition from the other entity or from the member while the member held the membership interest on a previous occasion; and
 (c) if subparagraph (a)(i) applies—at the time of the acquisition, the member *controlled (for value shifting purposes) the other entity, or vice versa, or a third entity controlled (for value shifting purposes) the member and the other entity; and
 (d) if subparagraph (a)(ii) applies—the same entity:
 (i) was a party to each acquisition and at the time of the acquisition controlled (for value shifting purposes) the other parties; or
 (ii) was a party to each acquisition and at the time of the acquisition was controlled (for value shifting purposes) by the other party; or
 (iii) was not a party to each acquisition but, at the time of the acquisition, controlled (for value shifting purposes) the parties to the acquisition;
  or any combination of subparagraphs (i) to (iii) occurred in relation to different acquisitions.

Reduction in revenue etc. asset's tax cost setting amount
 (6) The revenue etc. asset's *tax cost setting amount (after any application of section 705‑40, 705‑45 or 705‑47) is instead the amount that would apply if, in working out the step 1 amount in the table in section 705‑60, the *cost base and *reduced cost base of the *membership interest were reduced by the sum of the loss of pre‑CGT status adjustment amounts for the membership interest and all other membership interests that have loss of pre‑CGT status adjustment amounts.

Limit on reduction
 (7) However, the reduction only takes place to the extent that it does not result in the asset's *tax cost setting amount being less than the joining entity's *terminating value for the asset.
Note: The reduction under this section is converted into a capital loss available over a period of 5 income years starting with the income year in which the joining time occurs: see CGT event L1.

705‑58  Assets and liabilities not set off against each other
 (1) This Part applies separately to each asset and liability even if, in accordance with *accounting principles, they are required to be set off against each other.
 (2) This section has effect subject to section 705‑59.

705‑59  Exception: treatment of linked assets and liabilities
 (1) This section applies to each set of *linked assets and liabilities that the joining entity has immediately before the joining time.
 (2) One or more assets, and one or more liabilities, that an entity has constitute a set of linked assets and liabilities of the entity if, and only