Taxation Administration Act 1953

SCHEDULE 1 - COLLECTION AND RECOVERY OF INCOME TAX AND OTHER LIABILITIES  

Note: See section 3AA .

Chapter 2 - Collection, recovery and administration of income tax  

PART 2-10 - PAY AS YOU GO (PAYG) INSTALMENTS  

Division 45 - Instalment payments  

Subdivision 45-S - MEC groups  

Extended operation of Subdivision 45-Q

SECTION 45-920   CHANGE OF PROVISIONAL HEAD COMPANY  

Object

45-920(1)    
The object of this section (except subsection (9)) is to ensure that, for the purposes of this Part, when a company becomes the new *provisional head company of a *MEC group:

(a) the company inherits the history of the former provisional head company; and

(b) the history of the new provisional head company is effectively ignored.

45-920(2)    
This section applies to a *provisional head company of a *MEC group (the new provisional head company ) that is appointed under subsection 719-60(3) of the Income Tax Assessment Act 1997 if one of the following conditions is satisfied:

(a) the conditions in subsection 45-915(4) are satisfied in relation to the new provisional head company (whether or not Subdivision 45-Q applies to the company as the provisional head company of the group for any period of time);

(b) the new provisional head company is so appointed during the *instalment quarter of the company in which the MEC group is *created from a *consolidated group and either:

(i) the Commissioner gives the *initial head company instalment rate to the *head company of the consolidated group during that instalment quarter; or

(ii) Subdivision 45-Q applied to the head company of the consolidated group at the end of the previous instalment quarter.

45-920(3)    
Everything that happened before the starting time in relation to the company (the former company ) that was the *provisional head company of the *MEC group immediately before the starting time:

(a) is taken to have happened in relation to the new provisional head company instead of in relation to the former company; and

(b) is taken to have happened in relation to the new provisional head company instead of what would (apart from this section) be taken to have happened in relation to the new provisional head company before the starting time;

just as if, at all times before the starting time:

(c) the new provisional head company had been the former company; and

(d) the former company had been the new provisional head company.

45-920(4)    
For the purposes of this section, the starting time is the time at which the *cessation event happened to the former company (the event that results in the appointment of the new provisional head company).

45-920(5)    
To avoid doubt, subsection (3) also covers everything that, immediately before the starting time, was taken to have happened in relation to the former company because of:

(a) section 701-1 of the Income Tax Assessment Act 1997 (single entity rule); or

(b) section 701-5 of that Act (entry history rule); or

(c) section 703-75 of that Act (effects of an interposed company becoming the *head company of a *consolidated group); or

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

(e) section 45-710 in this Schedule (single entity rule for the purposes of this Part), including an application of that section under this Subdivision; or

(f) section 45-740 in this Schedule (effects of an interposed company becoming the head company of a consolidated group for the purposes of this Part); or

(g) this section; or

(h) one or more previous applications of any of the provisions covered by paragraphs (a) to (g).

45-920(6)    
In addition, and without affecting subsection (3):

(a) an assessment of the former company for an income year that ends before the income year that includes the starting time; or

(b) an amendment of the assessment;

is taken to be something that had happened to the new provisional head company, whether or not the assessment or amendment is made before the starting time.

45-920(7)    
This section has effect for the purposes of applying this Part to members of the *MEC group in relation to an *instalment quarter of the new provisional head company that ends after the starting time.

Note:

An assessment mentioned in subsection (6) may therefore be taken to be the base assessment of the new provisional head company for the purposes of this Part.

45-920(8)    
Subsections (1) to (7) are to be disregarded in applying section 45-915 (about the application of Subdivision 45-Q to a company as the *provisional head company of a *MEC group).

Note:

For example, if the Commissioner has given an initial head company instalment rate to the former company during an earlier instalment quarter, the rate is not, despite this section, treated as if it had been given to the new provisional head company for the purposes of section 45-915 . Subject to the other provisions in that section, Subdivision 45-Q therefore starts applying to the new provisional head company under subsection 45-915(4) .

Special rule for the former company

45-920(9)    
A provision of this Part that applies on an entity becoming a member (other than the *provisional head company) of a *MEC group does not apply to the former company when it becomes such a member at the starting time.

Note:

Section 45-755 (the entry rule, as applied under this Subdivision) therefore does not apply to the former company on the company becoming such a member of the MEC group.