New Business Tax System (Consolidation and Other Measures) Act 2003 (16 of 2003)

Schedule 7   Consolidation: interactions between Consolidation rules and other rules

Part 3   Consequential amendment of the Income Tax Assessment Act 1997

7   After subsection 705-65(3)

Insert:

(3AA) If, on the assumption that:

(a) the *members of the joined group had, just before the joining time, *disposed of their *membership interest in the joining entity; and

(b) the consideration received by the members for the disposal were equal to the *market value of the membership interest at that time;

they would have made a *capital loss that section 727-615 would have reduced (because of an indirect value shift), then the *reduced cost base of the membership interest that is to be used in subsection (1) of this section is reduced by the amount of that reduction.