Commonwealth Consolidated Acts

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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.

Guide to Subdivision 705-D



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