Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 705 - Tax cost setting amount for assets where entities become subsidiary members of consolidated groups  

Subdivision 705-A - Basic case: a single entity joining an existing consolidated group  

How to work out the allocable cost amount

SECTION 705-112   If joining entity transfers a FRT disallowed amount to the head company - step 6A in working out allocable cost amount  

705-112(1)    
For the purposes of step 6A in the table in section 705-60 , the step 6A amount is worked out by multiplying the sum of the *FRT disallowed amounts mentioned in subsection (2) by the *corporate tax rate.

705-112(2)    
The *FRT disallowed amounts are the joining entity ' s FRT disallowed amounts that:

(a)    did not accrue to the joined group before the joining time (see subsection (3) ); and

(b)    are transferred to the *head company under section 820-590 ; and

(c)    are not cancelled under section 820-592 ;

to the extent that they were not applied by the joining entity under paragraph 820-56(2)(b) in respect of the income year in which the joining time occurred or any earlier income year.

705-112(3)    
For the purposes of subsection (2) , a *FRT disallowed amount accrued to the joined group before the joining time if and to the extent that, assuming that as it arose it were instead a profit that was accruing, a distribution of that profit would have been a distribution made to the joined group out of profits that accrued to the joined group before the joining time.