CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-90
-
CONSOLIDATED GROUPS
History
Part 3-90 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
Division 705
-
Tax cost setting amount for assets where entities become subsidiary members of consolidated groups
History
Div 705 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
Subdivision 705-D
-
Where multiple entities are linked by membership interests
History
Subdiv 705-D inserted by No 117 of 2002, s 3 and Sch 4 item 4, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
Modified application of Subdivision 705-A
SECTION 705-227
Adjustment in working out step 3A of allocable cost amount to take account of membership interests held by linked entities in other linked entities
Object
705-227(1)
The object of this section is to modify the effect that section
705-93
(step 3A of allocable cost amount) has in accordance with this Subdivision so that it takes account of
*
membership interests that linked entities hold in other linked entities at the time (the
linked entity joining time
) when the linked entities become
*
subsidiary members of the group.
Apportionment of step 3A amount among first level interposed entities
705-227(2)
If:
(a)
under section
705-93
, in its application in accordance with this Subdivision, there is a step 3A amount for the purpose of working out the group's
*
allocable cost amount for a particular linked entity (the
subject entity
); and
(b)
at the linked entity joining time, one or more of the linked entities (the
first level entities
) in which the
*
head company holds
*
membership interests are interposed between the head company and the subject entity;
then the step 3A amount is apportioned among the first level entities and the subject entity on the following basis:
(c)
each first level entity has the following proportion of the step 3A amount:
| |
*Market value of first level entity's
direct and indirect membership
interests in subject entity
*Market value of all membership
interests in subject entity |
|
where:
market value of all membership interests in subject entity
means the
*
market value, at the linked entity joining time, of all
*
membership interests in the subject entity that are held by entities that become
*
members of the group at that time.
market value of first level entity's direct and indirect membership interests in subject entity
means so much of the *market value of all membership interests in the subject entity (as defined above) as is attributable to
*
membership interests that the first level entity holds directly, or indirectly through other linked entities; and
(d)
the subject entity has the remainder of the step 3A amount.
Membership interests in subsidiary members of group
705-227(3)
In applying section
705-93
for the purposes of this Subdivision, disregard paragraph
705-93(1)(f)
if:
(a)
the rollover asset mentioned in that section is a *membership interest in an entity that becomes a *subsidiary member at the linked entity joining time; and
(b)
the rollover asset is
not
held at that time by the entity that becomes the *head company of the group.
Note:
The step 3A amount is worked out under section
705-93
.
History
S 705-227(3) substituted by No 56 of 2010, s 3 and Sch 5 item 49, applicable on and after 1 July 2002. S 705-227(3) formerly read:
Step 3A amount for assets consisting of membership interests held by linked entities in other linked entities
705-227(3)
If:
(a)
before the linked entity joining time:
(i)
there was a roll-over under Subdivision 126-B (a
Subdivision 126-B roll-over
) in relation to a
*
CGT event that happened in relation to an asset (the
roll-over asset
); or
(ii)
former section 160ZZO of the
Income Tax Assessment Act 1936
applied in relation to a disposal (a
section 160ZZO roll-over
) of an asset (also the
roll-over asset
); and
(b)
the originating company in relation to the Subdivision 126-B roll-over, or the transferor in relation to the section 160ZZO roll-over, was a foreign resident; and
(c)
the recipient company in relation to the Subdivision 126-B roll-over, or the transferee in relation to the section 160ZZO roll-over, was an Australian resident and was not the entity that became the
*
head company of the group; and
(d)
between the Subdivision 126-B roll-over, or the section 160ZZO roll-over, and the linked entity joining time, no other CGT event happened in relation to the roll-over asset for which there was not a Subdivision 126-B roll-over or a section 160ZZO roll-over; and
(e)
the roll-over asset is a
*
membership interest in a linked entity, other than one that is held at that time by the entity that becomes the head company of the group;
then, subject to subsection (5), there is under section 705-93 a step 3A amount for the purpose of working out the group's
*
allocable cost amount for the linked entity (the
subject entity
) that holds the roll-over asset at the linked entity joining time.
S 705-227(3) amended by
No 101 of 2006
, s 3 and Sch 2 item 743, by amending the reference to a repealed inoperative provision in para (a)(ii), effective 14 September 2006. For application and savings provisions see the
CCH Australian Income Tax Legislation archive
.
705-227(4)
(Repealed by No 56 of 2010)
History
S 705-227(4) repealed by No 56 of 2010, s 3 and Sch 5 item 49, applicable on and after 1 July 2002. S 705-227(4) formerly read:
What the step 3A amount is
705-227(4)
The step 3A amount is:
(a)
if, as a result of the Subdivision 126-B roll-over mentioned in subparagraph (3)(a)(i), or the section 160ZZO roll-over mentioned in subparagraph (3)(a)(ii), a
*
capital loss of the originating company was disregarded or a capital loss of the transferor was not incurred
-
an increase amount equal to the capital loss; or
(b)
if, as a result of the Subdivision 126-B roll-over mentioned in subparagraph (3)(a)(i), or the section 160ZZO roll-over mentioned in subparagraph (3)(a)(ii), a
*
capital gain of the originating company was disregarded or a capital gain of the transferor did not accrue
-
a reduction amount equal to the capital gain.
705-227(5)
(Repealed by No 56 of 2010)
History
S 705-227(5) repealed by No 56 of 2010, s 3 and Sch 5 item 49, applicable on and after 1 July 2002. S 705-227(5) formerly read:
Apportionment of step 3A amount among first level interposed entities
705-227(5)
If at the linked entity joining time one or more linked entities, in which the
*
head company holds
*
membership interests, are interposed between the head company and the subject entity, then the step 3A amount is apportioned among those entities and the subject entity in the same way as a step 3A amount is apportioned under subsection (2).
History
S 705-227 inserted by No 16 of 2003, s 3 and Sch 1 item 22, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
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