Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 713 - Rules for particular kinds of entities  

Subdivision 713-A - Trusts  

Working out a joined group's allocable cost amount for a joining trust

SECTION 713-25   Undistributed, realised profits that accrue to joined group before joining time and could be distributed tax free - step 3 in working out allocable cost amount  

713-25(1)    
For the purposes of step 3 in the table in section 705-60 , if the joining entity is a trust, the step 3 amount is the sum of the trust ' s realised profits, to the extent that:

(a) they accrued to the joined group before the joining time (as defined in subsection 705-90(7) ); and

(b) as at the joining time, they have not been distributed to ^* members of the trust; and

(c) if each of them were distributed as mentioned in paragraphs 705-90(7)(a) and (b):

(i) they would be distributed otherwise than in respect of a unit or an interest in the trust; or

(ii) their non-assessable parts for the purposes of section 104-70 would be disregarded in working out whether or not a ^* capital gain had been made because of CGT event E4;

except to the extent that they recouped losses of any ^* sort that accrued to the joined group before the joining time (as defined in subsection 705-90(8) ).

Note:

If the joining entity, or an entity interposed between the head company and the joining entity, is a non-fixed trust, this section may involve determining how a power of appointment would have been exercised. Section 713-50 lists matters to have regard to in determining this.

Trusts not covered

713-25(2)    
Subsection (1) does not apply to a trust that is a ^* corporate tax entity at the joining time.

Note:

This excludes corporate unit trusts and public trading trusts, which are covered by the imputation system.