Commonwealth Consolidated Acts

[Index] [Table] [Search] [Search this Act] [Notes] [Noteup] [Previous] [Next] [Download] [Help]

INCOME TAX ASSESSMENT ACT 1997 - SECT 719.160

Tax cost setting rules for joining have effect with modifications

          (1A)  This section applies if an entity (the MEC joining entity ) becomes a * subsidiary member of a * MEC group at a time (the MEC joining time ).

             (1)  This section has effect for the head company core purposes set out in subsection 701-1(2).

General modifying rule

             (2)  The provisions mentioned in subsection (3) operate, for the purposes of setting the * tax cost of an asset of the MEC joining entity, as if each * subsidiary member of the group (including the MEC joining entity) that is an * eligible tier-1 company at the MEC joining time were a part of the * head company of the group, rather than a separate entity.

Note 1:       This subsection means that references in those provisions to matters internal to the group operate as if eligible tier-1 companies in the group were parts of the head company of the group. For example:

(a)    provisions operating if the head company holds (whether directly or indirectly) membership interests in another entity operate even if an eligible tier-1 company actually holds those interests; and

(b)    provisions operating if the head company owns or controls another entity operate even if one or more eligible tier-1 companies actually own or control that other entity; and

(c)    provisions operating if an entity is interposed between the head company and another entity operate even if the first entity is actually interposed between an eligible tier-1 company and the other entity.

Note 2:       If the MEC joining entity is an eligible tier-1 company, this subsection means the assets of the entity do not have their tax cost reset at the MEC joining time. This is because Subdivision 705-A (and related provisions) reset the tax cost of assets of subsidiary members of a group, but not assets of the head company.

             (3)  The provisions are:

                     (a)  section 701-10 (about setting the tax cost of assets of an entity joining a group); and

                     (b)  Subdivision 705-A; and

                     (c)  any other provision of this Act giving Subdivision 705-A a modified effect in circumstances other than those covered by that Subdivision.

Note:          An example of provisions covered by paragraph (c) are the provisions of Subdivision 705-B giving Subdivision 705-A a modified effect when a consolidated group is formed.



AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback