Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 711 - Tax cost setting amount for membership interests where entities cease to be subsidiary members of consolidated groups  

Tax cost setting amount for membership interests etc.  

SECTION 711-15   Tax cost setting amount where no multiple exit  

711-15(1)    

The ^* tax cost setting amount for each ^* membership interest in the leaving entity that ^* members of the old group held, where paragraph 711-10(b) does not apply, is worked out by:

(a) first, working out the old group's ^* allocable cost amount for the leaving entity in accordance with section 711-20 ; and

(b) next, if there is more than one class of membership interests in the leaving entity - allocating the allocable cost amount to each class in proportion to the ^* market value of all of the membership interests in the class; and

(c) next, allocating the result under paragraph (a) or (b) to each of the membership interests, or membership interests in the class, by dividing the result by the number of those membership interests; and

(d) finally, if the leaving entity is a trust - for each membership interest in the trust that satisfies these conditions:

(i) it is neither a unit nor an interest in the trust;

(ii) the member of the old group that held it began to hold it only because money or property was settled on the trust;

(iii) it either had no ^* cost base or it had a cost base of nil;

reducing the result under paragraph (c) to nil.

Note:

Compare the treatment of such interests when an entity joins a group: see section 713-20 .

Non-membership equity interests

711-15(2)    

For the purposes of this section, if at the leaving time a *member of the old group holds a *non-membership equity interest in the leaving entity, that non-membership equity interest is treated as if:

(a) it were a *membership interest in the leaving entity; and

(b) it were of a different class than any other membership interest in the leaving entity.