Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-90
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CONSOLIDATED GROUPS
Division 711
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Tax cost setting amount for membership interests where entities cease to be subsidiary members of consolidated groups
Tax cost setting amount for membership interests etc.
SECTION 711-35
If head company becomes entitled to certain deductions
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step 2 in working out allocable cost amount
711-35(1)
Work out the step 2 amount for the purposes of the table in subsection 711-20(1) by multiplying all deductions covered by subsection (2) by the *corporate tax rate.
711-35(2)
This subsection covers any deduction to which the leaving entity becomes entitled under section 701-40 as a result of the leaving entity ceasing to be a * subsidiary member of the old group, other than a deduction for expenditure:
(a) that is, forms part of or reduces, the cost of an asset that becomes an asset of the leaving entity because subsection 701-1(1) (the single entity rule) ceases to apply; or
(b) to which section 110-40 (about expenditure on assets acquired before 7.30 pm on 13 May 1997) applies.
711-35(3)
Subsection (2) does not cover a deduction under section 43-15 (which relates to *undeducted construction expenditure) if, because of section 701-40 (the exit history rule), the leaving entity is taken to have *acquired the asset to which the deduction relates at or before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997.
View history note
Hide history noteWork out the step 2 amount for the purposes of the table in subsection 711-20(1) by multiplying all deductions covered by subsection (2) by the *corporate tax rate.
711-35(2)
This subsection covers any deduction to which the leaving entity becomes entitled under section 701-40 as a result of the leaving entity ceasing to be a * subsidiary member of the old group, other than a deduction for expenditure:
(a) that is, forms part of or reduces, the cost of an asset that becomes an asset of the leaving entity because subsection 701-1(1) (the single entity rule) ceases to apply; or
(b) to which section 110-40 (about expenditure on assets acquired before 7.30 pm on 13 May 1997) applies.
711-35(3)
Subsection (2) does not cover a deduction under section 43-15 (which relates to *undeducted construction expenditure) if, because of section 701-40 (the exit history rule), the leaving entity is taken to have *acquired the asset to which the deduction relates at or before 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 1997.
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