Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-90
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CONSOLIDATED GROUPS
Division 705
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Tax cost setting amount for assets where entities become subsidiary members of consolidated groups
Subdivision 705-C
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Case where a consolidated group is acquired by another
Modifications of Subdivision 705-A for the purposes of this Subdivision
SECTION 705-200 Modified application of section 705-85
Object
705-200(1)
The object of this section is to ensure that if any of the following are not held by * members of either group:
(a) certain employee share interests in * subsidiary members of the acquired group;
(b) certain *non-membership equity interests in subsidiary members of the acquired group;
(c) certain preference share interests in subsidiary members of the acquired group;
Increase for certain membership interests in subsidiary members of acquired group
705-200(2)
Subsections 705-85(1) , (2) and (4) have effect as if a * membership interest in a * subsidiary member of the acquired group were a membership interest in the * head company of that group.
Non-membership equity interests
705-200(3)
Paragraph 705-85(3)(a) has effect as if it also increased the step 2 amount worked out under section 705-70 by the amount that would be the sum of the balances of the *non-share capital accounts of the *subsidiary members of the acquired group, assuming that:
(a) for a subsidiary member that is not a company - the subsidiary member were a company; and
(b) each *non-membership equity interest (if any) in a subsidiary member held at the acquisition time by a person other than a *member of the acquiring group or acquired group were a *non-share equity interest in the subsidiary member; and
(c) the non-share equity interests (if any) mentioned in paragraph (b) were the only non-share equity interests in the subsidiary member.
View history note
Hide history noteSECTION 705-200 Modified application of section 705-85
Object
705-200(1)
The object of this section is to ensure that if any of the following are not held by * members of either group:
(a) certain employee share interests in * subsidiary members of the acquired group;
(b) certain *non-membership equity interests in subsidiary members of the acquired group;
(c) certain preference share interests in subsidiary members of the acquired group;
and are therefore part of the cost of acquiring the acquired group, they increase the acquiring group's * allocable cost amount for the acquired group.
Increase for certain membership interests in subsidiary members of acquired group
705-200(2)
Subsections 705-85(1) , (2) and (4) have effect as if a * membership interest in a * subsidiary member of the acquired group were a membership interest in the * head company of that group.
Non-membership equity interests
705-200(3)
Paragraph 705-85(3)(a) has effect as if it also increased the step 2 amount worked out under section 705-70 by the amount that would be the sum of the balances of the *non-share capital accounts of the *subsidiary members of the acquired group, assuming that:
(a) for a subsidiary member that is not a company - the subsidiary member were a company; and
(b) each *non-membership equity interest (if any) in a subsidiary member held at the acquisition time by a person other than a *member of the acquiring group or acquired group were a *non-share equity interest in the subsidiary member; and
(c) the non-share equity interests (if any) mentioned in paragraph (b) were the only non-share equity interests in the subsidiary member.
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