Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-BA - Group conversions involving MEC groups  

SECTION 719-125   Head company of new group retains history of head company of old group  

719-125(1)    
Everything that happened in relation to the *head company of the old group before the conversion time is taken instead to have happened in relation to:

(a) if the head company of the old group is the same entity as the head company of the new group - that entity in its role as head company of the new group; or

(b) otherwise - the head company of the new group (just as if the head company of the new group had been the head company of the old group at all times before the conversion time).

719-125(2)    
To avoid doubt, subsection (1) also covers everything that, immediately before the conversion time, was taken to have happened in relation to the *head company of the old group because of:

(a) section 701-1 (the single entity rule); or

(b) section 701-5 (the entry history rule); or

(c) section 703-75 (about the effects of choice to continue *consolidated group after shelf company becomes new head company); or

(d) section 719-90 (about the effects of a change of head company of a *MEC group); or

(e) one or more previous applications of this Division.

719-125(3)    
Subsections (1) and (2) have effect:

(a) for the *head company core purposes in relation to an income year ending after the conversion time; and

(b) for the entity core purposes in relation to an income year ending after the conversion time; and

(c) for the purposes of determining the balance of the *franking account of the head company of the new group at and after the conversion time.

719-125(4)    
Subsections (1) and (2) have effect subject to:

(a) section 701-40 (Exit history rule); and

(b) a provision of this Act to which section 701-40 is subject because of section 701-85 (about exceptions to the core rules in Division 701 ).

Note:

An example of provisions covered by paragraph (b) of this subsection is Subdivision 717-E (about transferring to a company leaving a consolidated group various surpluses under the CFC rules in Part X of the Income Tax Assessment Act 1936 ).