Commonwealth Consolidated Acts Commonwealth Consolidated Acts(a) section 701 - 10 of the Income Tax Assessment Act 1997 (about setting the tax cost of assets that an entity brings into the group);
(b) Subdivision 705 - A of that Act, in its application in accordance with Subdivision 705 - B of that Act;
apply, for the purposes of setting the tax cost of an asset of the transitional foreign - held joining entity at the formation time, as if each subsidiary member of the group that is a transitional foreign - held subsidiary at the formation time were a part of the head company of the group, rather than a separate entity.
Note 1: This section means that references in those provisions to matters internal to the group operate as if transitional foreign - held subsidiaries 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 a transitional foreign - held subsidiary actually holds those interests; and
(b) provisions operating if the head company owns or controls another entity operate even if one or more transitional foreign - held subsidiaries 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 a transitional foreign - held subsidiary and the other entity.
Note 2: If the transitional foreign - held joining entity is a
transitional foreign - held subsidiary, this section means the assets of the
entity do not have their tax cost reset at the formation time. This is because
Subdivision 705 - A of the Income Tax Assessment Act 1997 , in its
application in accordance with Subdivision 705 - B of that Act, resets
the tax cost of assets of subsidiary members of a group, but not assets of the
head company.