Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies if:
(a) an entity becomes a subsidiary member of a consolidated group; and
(b) just before it does so, section 40 - 77 of this Act applies to an asset that it holds.
(2) For so long as the asset continues to be:
(a) an asset of the head company because subsection 701 - 1(1) (the single entity rule) of the Income Tax Assessment Act 1997 applies; or
(b) an asset of another entity, where it became such an asset as a result of that subsection ceasing to apply on the entity ceasing to be a subsidiary member of the group;
then, despite certain provisions of that Act applying, in accordance with subsection 701 - 55(2) of that Act, as if the asset were acquired for a payment equal to its tax cost setting amount:
(c) subsection 40 - 77(1) continues to apply to the asset; and
Note: This means that Division 40 of the Income Tax Assessment Act 1997 continues not to apply to an asset that is a mining, quarrying or prospecting right.
(d) subsection 40 - 77(2) continues to apply to the asset, but applies as if the reference in that subsection to the cost of the asset were a reference to the cost worked out on the basis that the asset were acquired for a payment equal to its tax cost setting amount; and
(e) subsection 40 - 77(3) continues to apply to the asset, but applies as if the reference in that subsection to the amount included in assessable income under subsection 40 - 285(1) of that Act were a reference to the amount so worked out on the basis that the asset were acquired for a payment equal to its tax cost setting amount.