New Business Tax System (Consolidation and Other Measures) Act 2003 (16 of 2003)

Schedule 14   Consolidation: liability rules

Income Tax Assessment Act 1997

1   At the end of Subdivision 709-A

Add:

Payment of group liability by former subsidiary member

709-95 Payment of group liability by former subsidiary member

(1) This section operates if:

(a) an entity (the former subsidiary ) ceases to be a *subsidiary member of a *consolidated group (the old group ) at a particular time (the leaving time) ; and

(b) at or after the leaving time, the former subsidiary:

(i) *pays a PAYG instalment for which it was jointly and severally liable under subsection 721-15(1) because it was a subsidiary member of the old group; or

(ii) *pays income tax for which it was jointly and severally liable under that subsection because it was a subsidiary member of the old group; and

(c) apart from this section, a *franking credit would arise under section 205-15 in the *franking account of the former subsidiary at a time (the crediting time ) because of that payment.

(2) The credit:

(a) does not arise at the crediting time in the *franking account of the former subsidiary; and

(b) instead, arises at the crediting time in the franking account of the entity that was the *head company of the old group at the leaving time.

709-100 Refund of income tax to former subsidiary member

(1) This section operates if:

(a) an entity (the former subsidiary ) ceases to be a *subsidiary member of a *consolidated group (the old group ) at a particular time (the leaving time) ; and

(b) at or after the leaving time, the former subsidiary *receives a refund of income tax for which it was jointly and severally liable under subsection 721-15(1) because it was a subsidiary member of the old group; and

(c) apart from this section, a *franking debit would arise under section 205-30 in the *franking account of the former subsidiary at a time (the debiting time ) because of that payment.

(2) The debit:

(a) does not arise at the debiting time in the *franking account of the former subsidiary; and

(b) instead, arises at the debiting time in the franking account of the entity that was the *head company of the old group at the leaving time.