Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES

PART 3-90 - CONSOLIDATED GROUPS

Division 711 - Tax cost setting amount for membership interests where entities cease to be subsidiary members of consolidated groups

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Tax cost setting amount for membership interests etc.

SECTION 711-46

711-46 Liability arising from transfer or assignment of securitised assets

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This section covers an accounting liability (the securitisation liability ) if the following circumstances exist:

(a) (Repealed by No 14 of 2018)

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(b) in working out the step 4 amount mentioned in subsection 711-45(1) in relation to the leaving entity, an amount would be added under that subsection for the securitisation liability (disregarding subsection 711-45(11) );

(c) a member of the old group transferred or equitably assigned one or more assets (the underlying securitised assets ) to another entity before the leaving 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 leaving entity at the leaving time (according to the leaving 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 leaving time;

(g) at the leaving time the *market value of the leaving entity ' s interest in the underlying securitised assets is nil, or is substantially less than the amount of the securitisation liability.

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History

S 711-46 amended by No 14 of 2018, s 3 and Sch 1 item 17, by repealing para (a), effective 1 April 2018. See note under s 716-440 . No 14 of 2018, s 3 and Sch 1 item 19 contains the following application provision:

19 Application - leaving case
(1)
The amendment made by item 17 of this Schedule applies in relation to an entity that ceases to be 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) just before the leaving time, a *member of the old group is an *ADI or a *financial entity;

S 711-46 inserted by No 14 of 2018, s 3 and Sch 1 item 13, effective 1 April 2018. See note under s 716-440 . No 14 of 2018, s 3 and Sch 1 item 15 contains the following application provision:

15 Application - leaving case
(1)
The amendments made by items 12 and 13 of this Schedule 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 after the 2014 budget time.

(2)
Subject to subitem (3), the amendments made by items 12 and 13 of this Schedule also apply in relation to an entity (the leaving entity ) that ceases to be 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 711-46 of the Income Tax Assessment Act 1997 (as inserted by this Schedule) existed in respect of the leaving entity; and

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

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

(ii) for the purposes of working out that allocable cost amount, worked out the step 4 amount mentioned in subsection 711-45(1) of that Act; and

(c) in working out that step 4 amount before the 2014 budget time, the head company added the amount mentioned in paragraph 711-46(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, in working out that allocable cost amount before the 2014 budget time, the head company of the old group included in the step 1 amount mentioned in subsection 711-25(1) of the Income Tax Assessment Act 1997 an amount (the addition to step 1 ) in respect of the leaving entity ' s interest in the underlying securitised assets mentioned in paragraph 711-46(c) of that Act (as inserted by this Schedule).

(5)
Increase the old group ' s allocable cost amount for the leaving entity by the addition to step 1.

(6)
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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