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INCOME TAX ASSESSMENT ACT 1997 - SECT 705.200

Modified application of section 705 - 85

Object

  (1)   The object of this section is to ensure that if any of the following are not held by * members of either group:

  (a)   certain employee share interests in * subsidiary members of the acquired group;

  (b)   certain * non - membership equity interests in subsidiary members of the acquired group;

  (c)   certain preference share interests in subsidiary members of the acquired group;

and are therefore part of the cost of acquiring the acquired group, they increase the acquiring group's * allocable cost amount for the acquired group.

Increase for certain membership interests in subsidiary members of acquired group

  (2)   Subsections   705 - 85(1), (2) and (4) have effect as if a * membership interest in a * subsidiary member of the acquired group were a membership interest in the * head company of that group.

Non - membership equity interests

  (3)   Paragraph   705 - 85(3)(a) has effect as if it also increased the step 2 amount worked out under section   705 - 70 by the amount that would be the sum of the balances of the * non - share capital accounts of the * subsidiary members of the acquired group, assuming that:

  (a)   for a subsidiary member that is not a company--the subsidiary member were a company; and

  (b)   each * non - membership equity interest (if any) in a subsidiary member held at the acquisition time by a person other than a * member of the acquiring group or acquired group were a * non - share equity interest in the subsidiary member; and

  (c)   the non - share equity interests (if any) mentioned in paragraph   (b) were the only non - share equity interests in the subsidiary member.


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