Tax Laws Amendment (2010 Measures No. 1) Act 2010 (56 of 2010)

Schedule 5   Consolidation

Part 17   CGT straddles

Income Tax Assessment Act 1997

153   At the end of Subdivision 716-Z

Add:

716-860 CGT event straddling joining or leaving time

(1) This section applies if:

(a) an entity (the joining entity ) becomes a subsidiary member of a *consolidated group at a particular time (the joining time ); and

(b) disregarding the operation of subsection 701-1(1) (the single entity rule), the joining entity held a *CGT asset at the joining time; and

(c) taking into account the operation of subsection 701-1(1) (the single entity rule), the *head company of the group held the CGT asset at the joining time; and

(d) a *CGT event happened in relation to the asset at a time before the joining time (disregarding this section), but the circumstances that gave rise to the CGT event first existed at a time on or after the joining time.

(2) This section also applies if:

(a) an entity (the leaving entity ) ceases to be a *subsidiary member of a *consolidated group at a particular time (the leaving time ); and

(b) taking into account the operation of subsection 701-1(1) (the single entity rule), the *head company of the group held a *CGT asset at the leaving time; and

(c) disregarding the operation of subsection 701-1(1) (the single entity rule), the leaving entity held the CGT asset at the leaving time; and

(d) a *CGT event happened in relation to the asset at a time before the leaving time (disregarding this section), but the circumstances that gave rise to the CGT event first existed at a time on or after the leaving time.

(3) For the purposes of this Act, treat the *CGT event as happening at the time when the circumstances that gave rise to the CGT event first existed.