Commonwealth Consolidated Acts

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INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 701A.5

Modified application of Part 3-90 of Income Tax Assessment Act 1997 to trading stock of continuing majority-owned entity

             (1)  The operation of Part 3-90 of the Income Tax Assessment Act 1997 is modified in accordance with this section in relation to each asset of a continuing majority-owned entity that is trading stock just before the entity becomes a subsidiary member of the entity's designated group.

Continuing majority-owned entity to revalue its trading stock under normal provisions

             (2)  For the entity core purposes:

                     (a)  subsection 701-35(4) of the Income Tax Assessment Act 1997 does not apply in relation to the asset; and

                     (b)  instead, the value of the asset at the end of the income year that ends, or, if section 701-30 of that Act applies, of the income year that is taken by subsection (3) of that section to end, is the value determined in accordance with sections 70-45 to 70-70 of that Act.

For head company, trading stock to be retained cost base asset with tax cost setting amount equal to entity's year-end valuation

             (3)  For the head company core purposes when the continuing majority-owned entity becomes a subsidiary member of the designated group, the asset is a retained cost base asset whose tax cost setting amount is equal to the value applicable in accordance with paragraph (2)(b).



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