Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 716 - Miscellaneous special rules  

Subdivision 716-A - Assessable income and deductions spread over several membership or non-membership periods  

Assessable income and deductions arising from share of net income of a partnership or trust, or from share of partnership loss

SECTION 716-80   Head company ' s assessable income and deductions  

716-80(1)    
If for some but not all of the income year the entity is a ^* subsidiary member of a ^* consolidated group or ^* MEC group:

(a) the assessable income for that income year of the head company of the group includes the entity ' s share (worked out under section 716-90 ) of each of these:

(i) the total assessable income of the partnership or trust for the income year so far as it is reasonably attributable to a period, during the income year, throughout which the entity was a ^* subsidiary member of the group but the partnership or trust was not ;

(ii) a proportion (worked under subsection (2) of this section) of the total assessable income of the partnership or trust for the income year so far as it is not reasonably attributable to a particular period within the income year; and

(b) the head company of the group can deduct for that income year the entity ' s share (worked out under section 716-90 ) of each of these:

(i) the total deductions of the partnership or trust for the income year so far as they are reasonably attributable to a period covered by subparagraph (a)(i) of this subsection;

(ii) a proportion (worked under subsection (2) of this section) of the total deductions of the partnership or trust for the income year so far as they are not reasonably attributable to a particular period within the income year.

Note 1:

If the entity is a subsidiary member of the group throughout the income year, the amount referred to in section 716-75 will be included in the head company ' s assessable income, or the head company can deduct that amount, for the income year because of section 701-1 (Single entity rule).

Note 2:

While the entity, and the partnership or trust, are both subsidiary members of the group, section 701-1 (Single entity rule) attributes to the head company all assessable income and deductions giving rise to the amount referred to in section 716-75 .

716-80(2)    
The proportion is worked out by multiplying the amount concerned by:

• the number of days that are in the ^* spreading period, and on which the entity was a ^* subsidiary member of the group but the partnership or trust was not ;

divided by:

• the number of days that are in the spreading period.