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

Schedule 2   Consolidation etc.

Part 9   International tax

Division 1   Elections about valuing interests in FIFs held as trading stock

Income Tax Assessment Act 1997

42   At the end of Subdivision 717-F

Add:

717-292 Entry history rule does not affect when head company may elect to value trading stock at market value

Section 701-5 (the entry history rule) does not affect the time limit set by subsection 70-70(3) for the *head company of the group to make an election under subsection 70-70(2).

Note: Subsection 70-70(2) lets the head company elect to value at market value interests in a FIF that are trading stock of the head company.

Example: The head company did not hold as trading stock an interest in any FIF before the joining time. At that time, the single entity rule caused the head company to start holding as trading stock an interest in a FIF that the joining entity had earlier held as trading stock.

Subsection 70-70(3) and this section let the head company make an election under subsection 70-70(2) before lodging its income tax return for the first income year that:

(a) ends after that time; and

(b) is an income year in which a notional accounting period for the FIF ends.