CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-90
-
CONSOLIDATED GROUPS
History
Part 3-90 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
Division 705
-
Tax cost setting amount for assets where entities become subsidiary members of consolidated groups
History
Div 705 inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
Subdivision 705-A
-
Basic case: a single entity joining an existing consolidated group
History
Subdiv 705-A inserted by No 68 of 2002, s 3 and Sch 1 item 2, effective 24 October 2002 and applicable on and after 1 July 2002 (see sec
700-1
of the
Income Tax (Transitional Provisions) Act 1997
).
How to work out the allocable cost amount
SECTION 705-76
705-76
Liability arising from transfer or assignment of securitised assets
This section covers an accounting liability (the
securitisation liability
) if the following circumstances exist:
(a)
(Repealed by No 14 of 2018)
(b)
in working out the step 2 amount mentioned in subsection
705-70(1)
in relation to the joining entity, an amount would be added under that subsection for the securitisation liability (disregarding subsection
705-70(4)
);
(c)
the joining entity transferred or equitably assigned one or more assets (the
underlying securitised assets
) to another entity before the joining time;
(d)
the securitisation liability:
(i)
arose from the transfer or equitable assignment of the underlying securitised assets; and
(ii)
is a liability of the joining entity at the joining time (according to the joining entity
'
s *accounting principles for tax cost setting);
(e)
the other entity was established for the purpose of securitising assets;
(f)
the underlying securitised assets were securitised in accordance with that purpose before the joining time;
(g)
at the joining time the *market value of the joining entity
'
s interest in the underlying securitised assets is nil, or is substantially less than the amount of the securitisation liability.
History
S 705-76 amended by No 14 of 2018, s 3 and Sch 1 item 16, by repealing para (a), effective 1 April 2018. See note under s
716-440
. No 14 of 2018, s 3 and Sch 1 item 18 contains the following application provision:
18 Application
-
joining case
(1)
The amendment made by item 16 of this Schedule applies in relation to an entity that becomes a subsidiary member of a consolidated group or MEC group under an arrangement that commences after the 2016 budget time.
(2)
In this item:
2016 budget time
means 7.30 pm, by legal time in the Australian Capital Territory, on 3 May 2016.
Para (a) formerly read:
(a)
at the joining time, a *member of the joined group is an *ADI or a *financial entity;
S 705-76 inserted by No 14 of 2018, s 3 and Sch 1 item 11, effective 1 April 2018. See note under s
716-440
. No 14 of 2018, s 3 and Sch 1 item 14 contains the following application provision:
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 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 on or before the 2014 budget time.
(3)
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)
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 conclude that, 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.
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