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-A - Basic case: a single entity joining an existing consolidated group  

How to work out the allocable cost amount

SECTION 705-62   No double counting of amounts in allocable cost amount  

705-62(1)    
The object of this section is to prevent a particular amount from being taken into account more than once in calculating the *allocable cost amount for the joining entity, in order to promote the object of this Subdivision set out in section 705-10 .

705-62(2)    
Subsection (3) applies if, apart from this section, 2 or more provisions of this Act operate with the result of altering:

(a) the *allocable cost amount for the joining entity; or

(b) the allocable cost amount for another entity that becomes a *subsidiary member of the group at the joining time;

because of a particular economic attribute of the joining entity (see subsection (6)).

705-62(3)    
Only one of those alterations is to be made, as follows:

(a) if the *head company of the group makes a choice in accordance with subsections (4) and (5) - the alteration specified in the choice is to be made;

(b) otherwise - the alteration that is most appropriate (in the light of the object of this Subdivision) is to be made.

705-62(4)    
A choice mentioned in paragraph (3)(a) must be made:

(a) by the day the *head company of the group lodges its *income tax return for the income year in which the joining time occurs; or

(b) within a further time allowed by the Commissioner.

705-62(5)    
A choice mentioned in paragraph (3)(a) must be made in writing.

705-62(6)    
The economic attributes of the joining entity mentioned in subsection (2) include the following:

(a) the joining entity's retained profits;

(b) the joining entity's distributions of profits to other entities;

(c) the joining entity's realised and unrealised losses;

(d) the joining entity's deductions;

(e) the joining entity's accounting liabilities (within the meaning of subsection 705-70(1) );

(f) consideration received by the joining entity for issuing *membership interests in itself.