Income Tax (Transitional Provisions) Act 1997
This section describes, for the purposes of item 2, column 4 of the table in subsection 703-15(2) of the Income Tax Assessment Act 1997 , a set of requirements that must be met for an entity (the test entity ) to be a subsidiary member of a consolidated group or a consolidatable group at a particular time (the test time ).
Note:
This subsection applies in relation to a MEC group as if the reference to item 2, column 4 of the table in subsection 703-15(2) of the Income Tax Assessment Act 1997 were a reference to subparagraph 719-10(1) (b)(ii) of that Act (see subsection 719-2(3) of this Act).
Test entity must be company
701C-10(2)
At the test time, the test entity must be a company.
At least one interposed entity must be a non-resident company or non-resident trust
701C-10(3)
At the test time, at least one of the interposed entities must be:
(a) a company (a non-resident company ) that is a foreign resident; or
(b) a trust (a non-resident trust ) that does not meet the requirements in any item of the table in section 703-25 of the Income Tax Assessment Act 1997 .
The interposed entities must all be of a particular kind
701C-10(4)
At the test time, each of the interposed entities must be:
(a) a subsidiary member of the group; or
(b) a non-resident company; or
(c) a non-resident trust; or
(d) an entity that holds membership interests in an entity interposed between it and the test entity, or in the test entity, only as a nominee of one or more entities each of which is a member of the group, a non-resident company or a non-resident trust; or
(e) a partnership, each of the partners in which is a non-resident company or a non-resident trust.
Test entity must be a subsidiary member on assumption that non-resident companies and non-resident trusts were subsidiary members
701C-10(5)
At the test time, it must be the case that the test entity would be a subsidiary member of the group if each interposed entity that is a non-resident company or non-resident trust were a subsidiary member of the group.
Additional requirement for consolidatable groups
701C-10(6)
If the group is a consolidatable group, the test time must be before 1 July 2004.
Additional requirement for consolidated groups at formation
701C-10(7)
If the group is a consolidated group and the test time is the time at which the group comes into existence as a consolidated group, the test time must be before 1 July 2004.
Additional requirement for consolidated groups after formation
701C-10(8)
If:
(a) the group is a consolidated group; and
(b) the test time is after the group comes into existence; and
(c) at the test time, one or more of the membership interests in the test entity are held by:
(i) a non-resident company; or
(ii) a non-resident trust; or
(iii) an entity that holds the membership interests only as a nominee of one or more entities each of which is a non-resident company or a non-resident trust; or
(iv) a partnership, each of the partners in which is a non-resident company or a non-resident trust;
then:
(d) from the time the group came into existence as a consolidated group until the test time, the test entity must have been a subsidiary member of the group; and
(e) at the time the group came into existence as a consolidated group, one or more of the membership interests in the test entity must have been held by an entity of a kind mentioned in subparagraph (c)(i), (ii), (iii) or (iv).
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