Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 713 - Rules for particular kinds of entities  

Subdivision 713-E - Partnerships  

Special rules where partnership joins consolidated group

SECTION 713-240   Partnership joins group - tax cost setting amount for partnership asset  

713-240(1)    
Work out the ^* tax cost setting amounts for the assets covered by subsection 713-235(3) as follows:

(a) firstly, add up the subsection (2) amounts for all the partnership cost setting interests in the partnership at the joining time (the result is the partnership cost pool );

Note 1:

Partnership cost setting interests held by a partner that becomes a subsidiary member of the group at the joining time are included in the calculation in paragraph (a). The operation of the cost setting rules in relation to that partner at the joining time may affect the subsection (2) amounts for those interests.

Note 2:

Partnership cost setting interests are included in the calculation in paragraph (a), even if the cost setting rules have not applied in relation to the interests (for example, if the interests were acquired directly by the head company).

(b) secondly, work out the tax cost setting amounts for the assets covered by subsection 713-235(3) that are ^* retained cost base assets, in accordance with section 705-25 ;

(c) thirdly, work out the tax cost setting amounts for the rest of the assets covered by subsection 713-235(3) , in accordance with subsection (3).

Subsection (2) amount for a partnership cost setting interest

713-240(2)    
For the purposes of paragraph (1)(a), the subsection (2) amount for a ^* partnership cost setting interest is the amount specified in the following table:

Working out the subsection (2) amount
Item	If the market value of the partnership cost setting interest is …	the subsection (2) amount for the partnership cost setting interest is …
1	equal to or greater than its *cost base	its cost base
2	less than its *cost base but greater than its *reduced cost base	its *market value
3	less than or equal to its *reduced cost base	its reduced cost base

Allocating partnership cost pool to partnership assets that are not retained cost base assets

713-240(3)    

Work out the ^* tax cost setting amounts for the assets mentioned in paragraph (1)(c) by applying sections 705-35 , 705-40 , 705-45 and 705-47 to those assets, as if:

(a) the partnership were, at the joining time, the joining entity mentioned in those sections; and

(b) the assets of the partnership were the assets covered by subsection 713-235(3) ; and

(c) the allocable cost amount mentioned in paragraph 705-35(1)(a) were the partnership cost pool.

713-240(4)    
For the purposes of this section, section 104-510 (CGT event L3) applies as if the group ' s allocable cost amount for the entity mentioned in that section were the partnership cost pool.