Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 711.70

  (1)   This section applies if:

  (a)   the leaving entity held assets at the time it became a * subsidiary member of the old group (disregarding subsection   701 - 1(1) (the single entity rule)); and

  (b)   some or all of the assets:

  (i)   stopped being * pre - CGT assets under Division   149 at a time (the Division   149 time ) when the * head company of the group held them under subsection   701 - 1(1) (the single entity rule); or

  (ii)   would have stopped being pre - CGT assets under Division   149 at a time (also the Division   149 time ) when the head company of the group held them under subsection   701 - 1(1) (the single entity rule) if they had been pre - CGT assets just before that time; and

  (c)   the leaving entity was a subsidiary member of the group at that time.

  (2)   The * pre - CGT proportion of the leaving entity at the leaving time is taken to be nil.

  (3)   Adjust the old group's * allocable cost amount for the leaving entity as follows:

  (a)   if the amount under subsection   (4) exceeds the amount under subsection   (6)--increase the allocable cost amount by the excess;

  (b)   if the amount under subsection   (4) falls short of the amount under subsection   (6)--reduce the allocable cost amount by the shortfall.

  (4)   Subject to subsection   (5), the amount under this subsection is:

  (a)   if Subdivision   705 - A applied in relation to the leaving entity at the time it became a * subsidiary member of the old group--the total of the amounts that were taken into account under subsection   705 - 65(1) for * membership interests in the leaving entity at that time; or

  (b)   otherwise--assuming that Subdivision   705 - A had applied in relation to the leaving entity at the time it became a subsidiary member of the old group, the total of the amounts that would have been taken into account under subsection   705 - 65(1) for membership interests in the leaving entity at that time.

  (5)   For the purposes of subsection   (4), if a * membership interest in the leaving entity was covered under paragraph   705 - 125(2)(a) (pre - CGT interests) when it became a * subsidiary member of the old group, treat the amount that was taken into account for the membership interest under subsection   705 - 65(1) as the interest's * market value just after the Division   149 time.

  (6)   The amount under this subsection is the old group's * allocable cost amount for the leaving entity, worked out on the assumption that the leaving entity ceased to be a * subsidiary member of the old group just after the Division   149 time.