Income Tax Assessment Act 1997

Membership interests treated as potentially subject to Subdivision 165-CC (about unrealised losses)  
711-60(1)
This section applies if, for any of the assets that are those of the ^* head company of the old group at the leaving time because the leaving entity is taken by subsection 701-1(1) to be a part of the head company:

(a) a percentage (the entry Subdivision 165-CC percentage ) of the asset (a Subdivision 165-CC asset ) was taken by subsection 705-120(3) to have been owned by the head company at the changeover time; and

(b) assuming the head company ^* disposed of the asset at the leaving time for an amount that would cause it to:

(i) make a ^* capital loss; or

(ii) be entitled to a deduction; or

(iii) make a ^* trading stock loss;

it would be prevented by Subdivision 165-CC from taking into account or deducting some or all of that loss or deduction; and

(c) Subdivision 165-CC would have that effect solely because of the operation of subsection 705-120(3) as mentioned in paragraph (a) of this subsection.

711-60(2)
If this section applies:

(a) a percentage, worked out under subsection (4), of each of the ^* membership interests in the leaving entity, that the ^* head company holds in the leaving entity just before the leaving time, is taken to have been owned by the head company at the changeover time mentioned in sections 165-115C and 165-115D; and

(b) the head company is taken not to have owned at the changeover time any other part of any of those membership interests.

Note: The membership interests would include those that are actually held by subsidiary members of the group, but which are treated as those of the head company under the single entity rule.

711-60(3)
The percentage is the percentage of the ^* tax cost setting amount under this Subdivision for the ^* membership interests that is attributable to the entry Subdivision 165-CC percentages of all of the Subdivision 165-CC assets.