Income Tax Assessment Act 1997



Division 711 - Tax cost setting amount for membership interests where entities cease to be subsidiary members of consolidated groups  

Tax cost setting amount for membership interests etc.  

SECTION 711-15   Tax cost setting amount where no multiple exit  


The * tax cost setting amount for each * membership interest in the leaving entity that * members of the old group held, where paragraph 711-10(b) does not apply, is worked out by:

(a) first, working out the old group's * allocable cost amount for the leaving entity in accordance with section 711-20 ; and

(b) next, if there is more than one class of membership interests in the leaving entity - allocating the allocable cost amount to each class in proportion to the * market value of all of the membership interests in the class; and

(c) next, allocating the result under paragraph (a) or (b) to each of the membership interests, or membership interests in the class, by dividing the result by the number of those membership interests; and

(d) finally, if the leaving entity is a trust - for each membership interest in the trust that satisfies these conditions:

(i) it is neither a unit nor an interest in the trust;

(ii) the member of the old group that held it began to hold it only because money or property was settled on the trust;

(iii) it either had no * cost base or it had a cost base of nil;
reducing the result under paragraph (c) to nil.

Compare the treatment of such interests when an entity joins a group: see section 713-20 .

Non-membership equity interests


For the purposes of this section, if at the leaving time a *member of the old group holds a *non-membership equity interest in the leaving entity, that non-membership equity interest is treated as if:

(a) it were a *membership interest in the leaving entity; and

(b) it were of a different class than any other membership interest in the leaving entity.


Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited

CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.

The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.