Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-90 - CONSOLIDATED GROUPS

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Division 701 - Core rules

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Supporting provisions

SECTION 701-60A Tax cost setting amount for asset emerging when entity leaves group

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701-60A(1)
This section applies for the purpose of working out the *tax cost setting amount of an asset if:

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

(b) the asset ' s tax cost is set under section 701-45 because it consists of a liability (the corresponding liability ) owed to the leaving entity.

701-60A(2)
The *tax cost setting amount is:

(a) unless subsection (3) or (4) applies - the *market value of the asset at the leaving time; or

(b) if subsection (3) applies - nil; or

(c) if subsection (4) applies - the least of the following amounts:

(i) the tax cost setting amount mentioned in paragraph (4)(c);

(ii) if the *head company of the old group was entitled to a deduction in respect of the asset for an income year ending on or before the leaving time - the tax cost setting amount mentioned in paragraph (4)(c) reduced by the amount of the deduction;

(iii) the market value of the asset at the leaving time.

701-60A(3)
This subsection applies if:

(a) the corresponding liability is not a debt; and

(b) either:

(i) at the time the corresponding liability arose, the entity to whom the corresponding liability was owed and the entity owing the corresponding liability were both *members of the old group; or

(ii) if subparagraph (i) does not apply - after the time the corresponding liability arose, a member of the old group *acquired the asset or started to have the corresponding liability.

701-60A(4)
This subsection applies if:

(a) the corresponding liability is not a debt; and

(b) at the time the corresponding liability arose, the entity to whom the corresponding liability was owed and the entity owing the corresponding liability were not both members of the old group; and

(c) the *tax cost of the asset was set under section 701-10 at the time an entity became a *subsidiary member of the old group, at the asset ' s *tax cost setting amount (whether or not section 701-58 applied in relation to the setting of that tax cost).

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History

S 701-60A inserted by No 14 of 2018, s 3 and Sch 1 item 27, effective 1 April 2018. See note under s 716-440 . No 14 of 2018, s 3 and Sch 1 item 30 contains the following application provision:

30 Application
(1)
The amendments made by this Part apply in relation to an entity that ceases to be a subsidiary member of a consolidated group or MEC group under an arrangement that commences on or after the 2013 budget time.

(2)
If an asset mentioned in subsection 701-60A(1) of the Income Tax Assessment Act 1997 (as inserted by this Schedule) is or is part of a Division 230 financial arrangement at the leaving time mentioned in that subsection, the amendments made by this Part also apply in relation to that asset in the same way as Part 2 of Schedule 1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 applies.
Note:

The application of the amendments made by Part 2 of Schedule 1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 is set out in Part 3 of that Schedule.

(3)
Subitem (4) applies if:

(a) an entity ceases to be a subsidiary member of a consolidated group or MEC group under an arrangement that commences before the 2013 budget time; and

(b) the amendments made by this Part apply because of subitem (2).

(4)
The Commissioner cannot amend an assessment of an entity for an income year in a particular way if:

(a) the entity lodged its income tax return for the income year before the 2013 budget time; and

(b) the Commissioner could not amend the assessment in that way if the amendments made by Part 6 and this Part were disregarded; and

(c) the entity has not requested the Commissioner to amend the assessment in that way.
Note:

Subitems (2), (3) and (4) have the effect that the amendments made by this Part operate in relation to an asset that is or is part of a Division 230 financial arrangement in the same way that the amendments made by Part 6 of this Schedule operate.

(5)
In this item:
2013 budget time
means 7.30 pm, by legal time in the Australian Capital Territory, on 14 May 2013.

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