Income Tax Assessment Act 1997

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 ).

Div 711 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 ).

S 711-40 substituted by No 14 of 2018, s 3 and Sch 1 item 28, effective 1 April 2018. For application provision, see note under s 701-60A . See also note under s 716-440 . S 711-40 formerly read:

SECTION 711-40 Liabilities owed to the leaving entity by members of the old group - step 3 in working out allocable cost amount  
711-40(1)
For the purposes of step 3 in the table in subsection 711-20(1), the step 3 amount is the total, for all liabilities owed by *members of the old group to the leaving entity at the leaving time, of the *market values of the corresponding assets of the leaving entity.

Where cost of liability is less than its market value

711-40(2)
However, if subsection (3) applies to any of the liabilities, the cost amount mentioned in that subsection, instead of the *market value, is to be used under subsection (1) for the liability in working out the step 3 amount.

711-40(3)
This subsection applies to a liability if:

(a) the *member of the old group would have made a *capital gain or a *capital loss for the *CGT event that, disregarding subsection 701-1(1) (the single entity principle), would have happened when the liability arose; and

(b) the amount (the cost amount ) of:

(i) if the CGT event is or would have been CGT event D1 - the *incidental costs; or

(ii) if the CGT event is CGT event D2, D3 or F1 - the expenditure incurred; or

(iii) in any other case - the *cost base or *reduced cost base;

that would be taken into account is less than the *market value of the liability.

S 711-40 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 ).