Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 715.50

  (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.