Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 715.379

  (1)   Subsection   (2) applies if:

  (a)   an entity (the leaving entity ) ceases to be a * subsidiary member of a * consolidated group at a time (the leaving time ); and

  (b)   a thing (the accounting liability ) is, in accordance with * accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board:

  (i)   a liability of the leaving entity at the leaving time that can or must be recognised in the entity's statement of financial position; or

  (ii)   a liability of the * head company of the group at the leaving time that can or must be recognised in the head company's statement of financial position; and

  (c)   because subsection   701 - 1(1) (the single entity rule) ceases to apply to the leaving entity at the leaving time:

  (i)   if subparagraph   (b)(i) applies--the accounting liability becomes a liability of the leaving entity, and an asset (the corresponding asset ) that consists of the liability becomes an asset of the head company; or

  (ii)   if subparagraph   (b)(ii) applies--the accounting liability becomes a liability of the head company, and an asset (the corresponding asset ) that consists of the liability becomes an asset of the leaving entity; and

  (d)   the corresponding asset's * tax cost is set at the leaving time under:

  (i)   if subparagraph   (b)(i) applies--section   701 - 20; or

  (ii)   if subparagraph   (b)(ii) applies--section   701 - 45; and

  (e)   the accounting liability is or is part of a * Division   230 financial arrangement.

  (2)   For the purposes of Division   230 of this Act and Schedule   1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 :

  (a)   if subparagraph   (1)(b)(i) applies--treat the leaving entity as starting to have the accounting liability at the leaving time for receiving a payment equal to the * tax cost setting amount of the corresponding asset; or

  (b)   if subparagraph   (1)(b)(ii) applies--treat the * head company as starting to have the accounting liability at the leaving time for receiving a payment equal to the tax cost setting amount of the corresponding asset.

Note:   The tax cost setting amount of the corresponding asset is determined under sections   701 - 60 and 701 - 60A.