Income Tax Assessment Act 1997
(a) the entity and one or more other entities cease to be * subsidiary members of the group at the same time because of an event happening in relation to one of them; and
(b) when the entity ceases to be a subsidiary member, it holds an asset consisting of a * membership interest in any of the other entities;
this section has effect for the entity core purposes.Object 701-50(2)
The cost of any * membership interest that one of the entities holds in another is to be treated in the same way as membership interests held by the * head company. In both cases the object is to preserve the alignment of costs for membership interests and assets (that was established when each entity became a * subsidiary member) by recognising the cost of those interests, when it ceases to be a subsidiary member, as an amount equal to the cost of the entity's assets at that time reduced by the amount of its liabilities. Setting tax cost of membership interests 701-50(3)
The asset's * tax cost is set just before the entity ceases to be a * subsidiary member of the group at the asset's * tax cost setting amount.
If the asset consists of a membership interest in a partnership, Subdivision 713-E sets the tax cost of interests in partnership assets, rather than membership interests in the partnership.
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