Commonwealth Consolidated Acts

INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997 - SECT 701C.10

  (1)   This section describes, for the purposes of item   2, column 4 of the table in subsection   703 - 15(2) of the Income Tax Assessment Act 1997 , a set of requirements that must be met for an entity (the test entity ) to be a subsidiary member of a consolidated group or a consolidatable group at a particular time (the test time ).

Note:   This subsection applies in relation to a MEC group as if the reference to item   2, column 4 of the table in subsection   703 - 15(2) of the Income Tax Assessment Act 1997 were a reference to subparagraph   719 - 10(1)(b)(ii) of that Act (see subsection   719 - 2(3) of this Act).

Test entity must be company

  (2)   At the test time, the test entity must be a company.

At least one interposed entity must be a non - resident company or non - resident trust

  (3)   At the test time, at least one of the interposed entities must be:

  (a)   a company (a non - resident company ) that is a foreign resident; or

  (b)   a trust (a non - resident trust ) that does not meet the requirements in any item of the table in section   703 - 25 of the Income Tax Assessment Act 1997 .

The interposed entities must all be of a particular kind

  (4)   At the test time, each of the interposed entities must be:

  (a)   a subsidiary member of the group; or

  (b)   a non - resident company; or

  (c)   a non - resident trust; or

  (d)   an entity that holds membership interests in an entity interposed between it and the test entity, or in the test entity, only as a nominee of one or more entities each of which is a member of the group, a non - resident company or a non - resident trust; or

  (e)   a partnership, each of the partners in which is a non - resident company or a non - resident trust.

Test entity must be a subsidiary member on assumption that non - resident companies and non - resident trusts were subsidiary members

  (5)   At the test time, it must be the case that the test entity would be a subsidiary member of the group if each interposed entity that is a non - resident company or non - resident trust were a subsidiary member of the group.

Additional requirement for consolidatable groups

  (6)   If the group is a consolidatable group, the test time must be before 1   July 2004.

Additional requirement for consolidated groups at formation

  (7)   If the group is a consolidated group and the test time is the time at which the group comes into existence as a consolidated group, the test time must be before 1   July 2004.

Additional requirement for consolidated groups after formation

  (8)   If:

  (a)   the group is a consolidated group; and

  (b)   the test time is after the group comes into existence; and

  (c)   at the test time, one or more of the membership interests in the test entity are held by:

  (i)   a non - resident company; or

  (ii)   a non - resident trust; or

  (iii)   an entity that holds the membership interests only as a nominee of one or more entities each of which is a non - resident company or a non - resident trust; or

  (iv)   a partnership, each of the partners in which is a non - resident company or a non - resident trust;

then:

  (d)   from the time the group came into existence as a consolidated group until the test time, the test entity must have been a subsidiary member of the group; and

  (e)   at the time the group came into existence as a consolidated group, one or more of the membership interests in the test entity must have been held by an entity of a kind mentioned in subparagraph   (c)(i), (ii), (iii) or (iv).