Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 715 - Interactions between this Part and other areas of the income tax law  

Subdivision 715-A - Treatment of unrealised losses existing when ownership or control of a company changes before or during consolidation  

Object

SECTION 715-15   Object of this Subdivision  

715-15(1)    
The object of this Subdivision is to give effect to the purposes of Subdivision 165-CC (about change of ownership or control of a company that has an unrealised net loss) in these cases:

(a) on formation of a ^* consolidated group, a ^* CGT asset held directly by the ^* head company is affected by that Subdivision, and the *business continuity test is failed;

(b) on an entity becoming a ^* subsidiary member of a consolidated group, an asset consisting of:

(i) a ^* membership interest that a ^* member of the group (including a chosen transitional entity under Division 701 of the Income Tax (Transitional Provisions) Act 1997 ) holds in the entity; or

(ii) a liability that the entity owes to such a member;

is affected by that Subdivision, and the business continuity test is failed;

(c) on a company becoming a subsidiary member:

(i) a CGT asset of the company that becomes an asset of the head company is affected by that Subdivision; and

(ii) because the company is a chosen transitional entity, the asset does not have its tax cost reset; and

(iii) the business continuity test is failed;

(d) on an entity ceasing to be a subsidiary member, a CGT asset of the head company that becomes an asset of the entity is affected by that Subdivision, and the business continuity test is failed.

Note:

Subdivision 165-CC also affects an entity that has deferred losses under Subdivision 170-D on assets that it formerly owned. Subdivision 715-D gives effect to the purposes of Subdivision 165-CC if such an entity becomes a member of a consolidated group.

715-15(2)    
This Subdivision achieves its object by supplementing and modifying the application of Subdivision 165-CC to take account of how the rest of this Part treats ^* members of a ^* consolidated group (in particular the provisions about entities becoming or ceasing to be members).