Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 705 - Tax cost setting amount for assets where entities become subsidiary members of consolidated groups  

Subdivision 705-C - Case where a consolidated group is acquired by another  

Modified application of Division 701 in relation to acquired group etc.

SECTION 705-180   Modifications of Division 701  

Certain provisions of Division 701 not to apply

705-180(1)    
If, because an entity ceases to be a ^* subsidiary member of the acquired group when this Subdivision applies, a provision of Division 701 (other than section 701-25 ) would otherwise apply, in relation to the acquired group for the head company core purposes set out in subsection 701-1(2) or for the entity core purposes set out in subsection 701-1(3) , the provision does not so apply.

Modified application of section 701-5

705-180(2)    
Section 701-5 (the entry history rule) applies in relation to the acquiring group for the head company core purposes set out in subsection 701-1(2) as if entities that are or have been the ^* subsidiary members of the acquired group were or had been parts of the ^* head company of the acquired group.

Modified application of section 701-25

705-180(3)    
The application of section 701-25 (which ensures tax-neutral consequences for a head company ceasing to hold assets when an entity leaves a group), in relation to the acquired group for the head company core purposes set out in subsection 701-1(2) and for the entity core purposes set out in subsection 701-1(3) , is modified as follows:

(a) the reference in subsection (4) of that section to the end of the income year is taken to be a reference to the end of the income year that ends or, if subsection 701-30(3) as modified by subsection (4) of this section applies, of the income year that is taken to end, when the entity ceases to be a ^* subsidiary member of the acquired group;

(b) the section applies (as modified by paragraph (a) of this subsection) to the entity that is the ^* head company of the acquired group ceasing to be a ^* member of that group in the same way as it applies to an entity that is a subsidiary member of that group ceasing to be a subsidiary member.

Modified application of section 701-30

705-180(4)    
If the acquired group only exists for part of the income year, section 701-30 (about an entity not being a subsidiary member of a group for a whole income year) applies in relation to the acquired group for the head company core purposes in the same way as it applies to work out the taxable income, tax payable on that taxable income and loss of each ^* sort for an entity for a non-membership period.