Commonwealth Consolidated Acts Commonwealth Consolidated ActsWhen section applies
(1) This section applies if any of the transitional entities in the transitional group is a chosen transitional entity.
Allocable cost amount to be worked out in special way
(2) If this section applies, the group's allocable cost amount for each of the entities, other than a chosen transitional entity, that become subsidiary members when the group comes into existence (each of which is a non - chosen subsidiary ) is worked out in a special way.
How to work out allocable cost amount
(3) The allocable cost amount for each non - chosen subsidiary is the sum of:
(a) the head company adjusted allocable amount for the non - chosen subsidiary (see subsection (4)); and
(b) for each sub - group (see subsection (6)) that exists in relation to the non - chosen subsidiary--the sub - group's notional allocable cost amount (see subsection(5)) for the non - chosen subsidiary.
Head company adjusted allocable amount
(4) The head company adjusted allocable amount for the non - chosen subsidiary is the amount that would be the transitional group's allocable cost amount for that entity if;
(a) the holding of all sub - group membership interests were disregarded; and
(b) only the following proportion of each of the step 2 to step 7 amounts in the table in section 705 - 60 of the Income Tax Assessment Act 1997 was taken into account:
where:
market value of all membership interests in non - chosen subsidiary means the market value, at the time the group comes into existence, of all membership interests in the non - chosen subsidiary that are held by entities that become members of the group at that time.
market value of head company's direct and indirect membership interests in non - chosen subsidiary means the market value, at the time the group comes into existence, of all membership interests in the non - chosen subsidiary that the head company holds directly or indirectly through interposed entities that become subsidiary members of the group at that time and are not included in any sub - group in relation to the non - chosen subsidiary.
Sub - group's notional allocable cost amount
(5) For each sub - group that exists in relation to the non - chosen subsidiary, there is a sub - group's notional allocable cost amount . That amount is the amount that would be a consolidated group's allocable cost amount for the non - chosen subsidiary if:
(a) the consolidated group came into existence at the same time as the transitional group and consisted only of the non - chosen subsidiary and the entities comprising the sub - group; and
(b) the chosen transitional entity in the sub - group were the head company of the consolidated group; and
(c) the only membership interests that any entity held at or before that time in any other entity that became a member of the consolidated group were the sub - group membership interests (see subsection (6)) in relation to the sub - group, and any such entity held those membership interests during the period when it actually held them; and
(d) only the following proportion of each of the step 2 to step 7 amounts in the table in section 705 - 60 of the Income Tax Assessment Act 1997 was taken into account:
where:
market value of all membership interests in non - chosen subsidiary means the market value, at the time the group comes into existence, of all membership interests in the non - chosen subsidiary that are held by entities that become members of the group at that time.
market value of chosen transitional entity's direct and indirect membership interests in non - chosen subsidiary means the market value, at the time the group comes into existence, of all membership interests in the non - chosen subsidiary that the chosen transitional entity holds directly or indirectly through interposed entities that are included in the sub - group.
Sub - group and sub - group membership interests
(6) If a chosen transitional entity holds membership interests in a non - chosen subsidiary, either directly or indirectly through one or more other entities, each of which is a non - chosen subsidiary:
(a) the chosen transitional entity and each interposed non - chosen subsidiary comprise a sub - group in relation to the non - chosen subsidiary (unless the non - chosen subsidiary is included in a sub - group in relation to another non - chosen subsidiary); and
(b) the following membership interests are the sub - group membership interests in relation to the sub - group:
(i) the membership interests that the chosen transitional entity holds directly in the non - chosen subsidiary or in any of the interposed non - chosen subsidiaries;
(ii) the membership interests that each interposed non - chosen subsidiary holds directly in the non - chosen subsidiary or in any of the other interposed non - chosen subsidiaries.