(1) A * membership interest held by an entity (the holding entity ) in another entity (the test entity ) at a time is an indirect Australian real property interest at that time if:
(a) the interest passes the * non-portfolio interest test (see section 960-195):
(i) at that time; or
(ii) throughout a 12 month period that began no earlier than 24 months before that time and ended no later than that time; and
(b) the interest passes the principal asset test in section 855-30 at that time.
(2) For the purposes of subsection (1), in working out whether the interest passes the * non-portfolio interest test and the principal asset test in section 855-30:
(a) apply section 350 of the Income Tax Assessment Act 1936 as if the words ", or is entitled to acquire," (wherever occurring) were omitted; and
(b) apply section 351 of that Act as if:
(i) the words ", or that the beneficiary is entitled to acquire" (wherever occurring) were omitted; and
(ii) the words ", or that the entity is entitled to acquire" in paragraph 351(2)(d) were omitted.
(3) The first element of the * cost base and * reduced cost base of a * CGT asset on 10 May 2005 is the * market value of the asset on that day if, on that day:
(a) the CGT asset was a * membership interest you held in another entity; and
(b) you were a foreign resident, or the trustee of a trust that was not a * resident trust for CGT purposes; and
(c) the CGT asset was a * post-CGT asset; and
(d) the CGT asset did not have the necessary connection with Australia (within the meaning of this Act as in force on that day) disregarding the operation of paragraph (b) of item 5 and paragraph (b) of item 6 of the table in section 136- 25 (as in force on that day).
(4) Also, Parts 3-1 and 3-3 apply to the asset as if you had * acquired it on that day.