Tax Laws Amendment (2004 Measures No. 2) Act 2004 (83 of 2004)

Schedule 2   Consolidation etc.

Part 13   Privatised assets

Income Tax Assessment Act 1997

74   At the end of Division 715

Add:

[The next Subdivision is Subdivision 715-V.]

Subdivision 715-V - Entity ceasing to be exempt from income tax on becoming subsidiary member of consolidated group

Table of sections

715-900 Transition time taken to be just before joining time

715-900 Transition time taken to be just before joining time

(1) This section has effect if:

(a) an entity becomes a *subsidiary member of a *consolidated group at a time (the joining time ); and

(b) the entity's *ordinary income and *statutory income were not (to any extent) assessable income just before the joining time.

(2) Division 57 in Schedule 2D to the Income Tax Assessment Act 1936 and Division 58 of this Act have effect as if the entity's *ordinary income or *statutory income had become to some extent assessable income just before the joining time.

Note 1: Those Divisions deal with entities whose ordinary income and statutory income were previously exempt from income tax.

Note 2: The operation of Division 58 just before the joining time can affect the basis on which the tax cost is set for a depreciating asset that becomes an asset of the head company of the consolidated group at the joining time because of section 701-1 (the single entity rule). That Division provides the basis for working out under Division 40 the asset's adjustable value, which:

(a) can affect the tax cost setting amount for the asset under section 705-50; and

(b) is the entity's terminating value for the asset, which in turn can affect the tax cost setting amount for the asset under sections 705-40, 705-45, 705-47 and 705-50.