Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 701.61

Assets in relation to Division 230 financial arrangement--head company's assessable income or deduction

             (1)  This section applies if:

                     (a)  an entity (the joining entity ) becomes a * subsidiary member of a * consolidated group; and

                     (b)  paragraph 701-55(5A)(b) applies in relation to one or more assets of the joining entity.

             (2)  Work out if the total of the * Division 230 starting values for those assets exceeds or falls short of the total of their * tax cost setting amounts.

             (3)  If there is an excess, an amount equal to 25% of that excess is included in the * head company's assessable income for:

                     (a)  the income year in which the particular time mentioned in subsection 701-55(5A) occurs; and

                     (b)  each of the 3 subsequent income years.

             (4)  If there is a shortfall, the * head company is entitled to a deduction equal to 25% of that shortfall for:

                     (a)  the income year in which the particular time mentioned in subsection 701-55(5A) occurs; and

                     (b)  each of the 3 subsequent income years.



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