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 716 inserted by No 117 of 2002, s 3 and Sch 1 item 3, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec 700-1 of the Income Tax (Transitional Provisions) Act 1997 ).

Subdiv 716-S heading substituted by No 15 of 2017, s 3 and Sch 4 item 77, effective 1 April 2017. The heading formerly read:

Subdivision 716-S - Miscellaneous consequences of tax cost setting

Subdiv 716-S inserted by No 56 of 2010, s 3 and Sch 5 item 4, applicable on and after 1 July 2002.

No 56 of 2010, s 3 and Sch 5 item 8 contains the following transitional provision:

8 Transitional provision - use of the tax cost setting amount  
(1)
This item applies if:

(a) the tax cost of an asset was set at the time (the joining time ) an entity (the joining entity ) became a subsidiary member of a consolidated group or MEC group, at the asset's tax cost setting amount; and

(b) the asset is a trade receivable that is denominated in foreign currency; and

(c) CGT event C2 happens in relation to the asset:

(i) after the joining time; and

(ii) before 23 August 2006; and

(d) just before the CGT event, the head company of the group held the asset because of the operation of subsection 701-1(1) of the Income Tax Assessment Act 1997 (the single entity rule); and

(e) disregarding section 118-20 of that Act, there is a capital gain or capital loss from the event; and

(f) the head company of the group makes a choice to apply this item, in accordance with subitems (4) and (5).

(2)
These provisions do not apply to the CGT event:

(a) section 6-5 of the Income Tax Assessment Act 1997 (about ordinary income);

(b) any other provision of that Act that includes an amount in assessable income, other than a provision in Part 3-1 or 3-3 of that Act;

(c) section 8-1 of that Act (about amounts you can deduct);

(d) any other provision of that Act that allows you to deduct an amount from your assessable income;

(e) section 118-20 of that Act.

(3)
The provisions referred to in subitem (2) can apply to the CGT event to the extent that any capital gain or capital loss from the event is attributable to currency exchange rate fluctuations.

(4)
A choice mentioned in paragraph (1)(f) must be made:

(a) by the day the head company lodges its income tax return for the income year in which the relevant CGT event happened; or

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

(5)
The way the head company prepares its income tax return is sufficient evidence of the making of the choice.

S 716-440(1) amended by No 64 of 2020, s 3 and Sch 3 item 111, by substituting " subsection (3) " for " subsection (2) " in para (e), effective 1 July 2020.

S 716-440 inserted by No 14 of 2018, s 3 and Sch 1 item 20, effective 1 April 2018. No 14 of 2018, s 3 and Sch 1 item 21 contains the following application provision:

21 Application  
(1)
The amendments made by this Part apply in relation to an income year in respect of an entity that becomes a subsidiary member of a consolidated group or MEC group under an arrangement that commences on or after the 2013 budget time.

(2)
Subitem (3) applies if the arrangement commenced before the start of the day on which the Bill that became this Act was introduced into the House of Representatives.

(3)
Despite subitem (1), section 716-440 of the Income Tax Assessment Act 1997 (as inserted by this Part) applies as if:

(a) the words " the sum of " and " and its *associates " in paragraph (1)(f) of that section were omitted; and

(b) the words " the sum of " and " and its associates " in paragraph (1)(g) of that section were omitted; and

(c) subsection (2) of that section were repealed.

(4)
In this item:

2013 budget time
means 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013.

No 14 of 2018, s 3 and Sch 1 item 31 contains the following provision:

31 Commencement of arrangements  
(1)
Subitems (2), (3) and (4) specify, for the purpose of this Schedule, the time of commencement of an arrangement under which:

(a) an entity becomes a subsidiary member of a consolidated group or MEC group; or

(b) an entity that ceases to be a subsidiary member of a consolidated group or MEC group.

(2)
If the arrangement is or relates to a takeover bid (within the meaning of the Corporations Act 2001 ) the time is when:

(a) for an off-market bid (within the meaning of that Act) - step 4 of the table in subsection 633(1) of that Act is completed; or

(b) for a market bid (within the meaning of that Act) - step 2 of the table in subsection 635(1) of that Act is completed.

(3)
If a court orders, under subsection 411(1) of the Corporations Act 2001 :

(a) a meeting or meetings of a company ' s members about the arrangement; or

(b) a meeting or meetings of one or more classes of a company ' s members about the arrangement;

the time is when the application for the order was made.

(4)
If subitem (2) or (3) does not apply, the time is when the decision to enter into the arrangement was made.