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INCOME TAX ASSESSMENT ACT 1997 - SECT 715.920

Effect on restructures--original entity is a head company that becomes a subsidiary member of another group

             (1)  This section applies if:

                     (a)  section 124-784A applies in relation to an * arrangement; and

                     (b)  the original entity (within the meaning of that section) for the arrangement is the * head company of a * consolidated group (the acquired group ) just before the arrangement was completed; and

                     (c)  as a result of the arrangement:

                              (i)  the original entity; and

                             (ii)  the * subsidiary members of the acquired group just before the arrangement was completed;

                            become subsidiary members of another consolidated group.

Note:          Sections 124-784A and 124-784B apply to arrangements for restructures.

             (2)  For the purposes of section 124-784B:

                     (a)  the original entity is taken to be the * head company of the acquired group at the completion time (within the meaning of that section) for the * arrangement; and

                     (b)  the operation of this Part for the head company core purposes (mentioned in subsection 701-1(2)) in relation to:

                              (i)  the original entity; and

                             (ii)  the entities that were * subsidiary members of the acquired group just before the arrangement was completed;

                            continue to have effect at the completion time for the arrangement; and

                     (c)  the completion time for the arrangement is taken to be the time the original entity becomes a member of the other group; and

                     (d)  disregard Division 701 (Core rules) in relation to the original entity becoming a member of the other group.

Note:          Paragraph (b) means that, for the purposes of section 124-784B, the subsidiary members of the acquired group are treated as part of the original entity.

             (3)  The * head company of the other group may choose for:

                     (a)  section 701-10 (cost to head company of assets of joining entity); and

                     (b)  subsection 701-35(4) (setting value of trading stock at tax-neutral amount); and

                     (c)  subsection 701-35(5) (setting value of registered emissions unit at tax-neutral amount);

not to apply to the original entity's assets in respect of the original entity becoming a * subsidiary member of the other group.

Note:          This subsection does not affect the application of subsection 701-1(1) (the single entity rule).



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