Treasury Laws Amendment (Income Tax Consolidation Integrity) Act 2018 (14 of 2018)

Schedule 1   Consolidation

Part 3   Securitised assets: 2014 Budget

Income Tax Assessment Act 1997

14   Application - joining case

(1) The amendments made by items 10 and 11 of this Schedule apply in relation to an entity that becomes a subsidiary member of a consolidated group or MEC group under an arrangement that commences (see Part 8 of this Schedule) after the 2014 budget time.

(2) Subject to subitems (3) and (6), the amendments made by items 10 and 11 of this Schedule also apply in relation to an entity (the joining entity ) that becomes a subsidiary member of a consolidated group or MEC group under an arrangement that commences (see Part 8 of this Schedule) on or before the 2014 budget time.

(3) Subitem (2) does not apply if the Commissioner considers that it is reasonable to concludethat:

(a) the circumstances mentioned in section 705-76 of the Income Tax Assessment Act 1997 (as inserted by this Schedule) existed in respect of the joining entity; and

(b) before the 2014 budget time, the head company of the group:

(i)worked out the group's allocable cost amount for the joining entity; and

(ii) for the purposes of working out that allocable cost amount, worked out the step 2 amount mentioned in subsection 705-70(1) of that Act; and

(c) in working out that step 2 amount before the 2014 budget time, the head company added the amount mentioned in paragraph 705-76(b) of that Act (as inserted by this Schedule).

(4) Subitem (5) applies if:

(a) subitem (2) does not apply because of subitem (3); and

(b) the Commissioner considers that it is reasonable to concludethat, before the 2014 budget time, the head company of the group worked out a tax cost setting amount for the joining entity's interest in the underlying securitised assets mentioned in paragraph 705-76(c) of the Income Tax Assessment Act 1997 (as inserted by this Schedule).

(5) Reduce the group's allocable cost amount for the joining entity by the tax cost setting amount mentioned in paragraph (4)(b).

(6) Subitem (2) does not apply if the Commissioner considers that it is reasonable to conclude that:

(a) the circumstances mentioned in section 705-76 of the Income Tax Assessment Act 1997 (as inserted by this Schedule) existed in respect of the joining entity; and

(b) the head company of the group first worked out the group's allocable cost amount for the joining entity:

(i) after the 2014 budget time; and

(ii) before the commencement of this item.

(7) In this item:

2014 budget time means 7.30 pm, by legal time in the Australian Capital Territory, on 13 May 2014.