Tax Laws Amendment (2008 Measures No. 6) Act 2009 (14 of 2009)

Schedule 1   CGT roll-overs for corporate restructures

Income Tax Assessment Act 1997

4   At the end of Division 715

Add:

Subdivision 715-W - Effect on arrangements where CGT roll-overs are obtained

Table of sections

715-910 Effect on restructures - original entity becomes a subsidiary member

715-915 Effect on restructures - original entity is a head company

715-920 Effect on restructures - original entity is a head company that becomes a subsidiary member of another group

715-925 Effect on restructures - original entity ceases being a subsidiary member

715-910 Effect on restructures - original entity becomes a subsidiary member

(1) This section applies if:

(a) as a result of an *arrangement to which section 124-784A applies, an original entity (within the meaning of that section) becomes a *subsidiary member of a *consolidated group; and

(b) section 715-920 does not apply.

Note 1: Section 715-920 applies if the original entity was the head company of another consolidated group before the arrangement was completed.

Note 2: Sections 124-784A and 124-784B apply to arrangements for restructures.

(2) For the purposes of section 124-784B:

(a) the completion time (within the meaning of that section) for the *arrangement is taken to be the time the original entity becomes a member of the group; and

(b) disregard Division 701 (Core rules) in relation to the original entity becoming a member of the group.

(3) The *head company of the group may choose for:

(a) section 701-10 (cost to head company of assets of joining entity); and

(b) subsection 701-35(4) (setting value of trading stock at tax-neutral amount);

not to apply to the original entity's assets in respect of the original entity becoming a *subsidiary member of the group.

Note: This subsection does not affect the application of subsection 701-1(1) (the single entity rule).

715-915 Effect on restructures - original entity is a head company

If:

(a) section 124-784A applies in relation to an *arrangement; and

(b) the original entity (within the meaning of that section) for the arrangement is the *head company of a *consolidated group just before the arrangement was completed; and

(c) section 715-920 does not apply;

then, for the purposes of section 124-784B, subsection 701-1(1) (the single entity rule) and section 701-5 (the entry history rule) apply in respect of the group.

Note 1: This section does not otherwise affect the application of subsection 701-1(1) or section 701-5.

Note 2: Sections 124-784A and 124-784B apply to arrangements for restructures.

715-920 Effect on restructures - original entity is a head company that becomes a subsidiary member of another group

(1) This section applies if:

(a) section 124-784A applies in relation to an *arrangement; and

(b) the original entity (within the meaning of that section) for the arrangement is the *head company of a *consolidated group (the acquired group ) just before the arrangement was completed; and

(c) as a result of the arrangement:

(i) the original entity; and

(ii) the *subsidiary members of the acquired group just before the arrangement was completed;

become subsidiary members of another consolidated group.

Note: Sections 124-784A and 124-784B apply to arrangements for restructures.

(2) For the purposes of section 124-784B:

(a) the original entity is taken to be the *head company of the acquired group at the completion time (within the meaning of that section) for the *arrangement; and

(b) the operation of this Part for the head company core purposes (mentioned in subsection 701-1(2)) in relation to:

(i) the original entity; and

(ii) the entities that were *subsidiary members of the acquired group just before the arrangement was completed;

continue to have effect at the completion time for the arrangement; and

(c) the completion time for the arrangement is taken to be the time the original entity becomes a member of the other group; and

(d) disregard Division 701 (Core rules) in relation to the original entity becoming a member of the other group.

Note: Paragraph (b) means that, for the purposes of section 124-784B, the subsidiary members of the acquired group are treated as part of the original entity.

(3) The *head company of the other group may choose for:

(a) section 701-10 (cost to head company of assets of joining entity); and

(b) subsection 701-35(4) (setting value of trading stock at tax-neutral amount);

not to apply to the original entity's assets in respect of the original entity becoming a *subsidiary member of the other group.

Note: This subsection does not affect the application of subsection 701-1(1) (the single entity rule).

715-925 Effect on restructures - original entity ceases being a subsidiary member

If, as a result of an *arrangement to which section 124-784A applies, an original entity (within the meaning of that section):

(a) ceases to be a *subsidiary member of a *consolidated group after the completion time (within the meaning of that section) for the arrangement; and

(b) does not become a member of another consolidated group;

then, for the purposes of section 124-784B, the completion time for the arrangement is taken to happen at the time of the cessation.

Note: Sections 124-784A and 124-784B apply to arrangements for restructures.