Tax Laws Amendment (2012 Measures No. 2) Act 2012 (99 of 2012)

Schedule 2   Consolidation and TOFA

Income Tax Assessment Act 1997

4   After section 715-375

Insert:

715-378 Cost setting - head company’s right to receive or obligation to provide payment

(1) This section applies in relation to an asset or a liability if:

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

(b) the asset or liability becomes that of the head company of the group because subsection 701-1(1) (the single entity rule) applies at the joining time; and

(c) in the case of an asset - subsection 701-55(5A) applies in relation to the asset at the joining time; and

(d) in the case of a liability - subsection 715-375(2) applies in relation to the liability at the joining time.

(2) In the case of an asset, for the purposes of section 230-60, assume that the *head company of the group acquired the asset at the joining time (as mentioned in subsection 701-55(5A)) in return for the head company starting to have an obligation to provide the payment mentioned in that subsection.

(3) In the case of a liability, for the purposes of section 230-60, assume that the *head company of the group started to have the liability at the joining time (as mentioned in subsection 715-375(2)) in return for the head company starting to have a right to receive the payment mentioned in that subsection.