Income Tax Assessment Act 1997
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Hide history noteSECTION 715-360 Deferred losses brought in by subsidiary member 715-360(1)
This section applies if, just before the time (the membership time ) when a company (the deferred loss company ) becomes a * subsidiary member of a * consolidated group, it had a * 170-D deferred loss that:
(a) it made on a * CGT asset that is a * 165-CC tagged asset of the company at the membership time because of paragraph 165-115A(1A)(b) (which covers CGT assets on which it has 170-D deferred losses); and
(b) as at the membership time has not * revived.
715-360(2)
If a * loss denial pool of the * head company is created under subsection 715-70(2) because of the deferred loss company becoming a * subsidiary member of the group, each * 170-D deferred loss of that kind that the deferred loss company had just before the membership time is added to the loss denial pool at that time.
715-360(3)
Otherwise, a loss denial pool of the * head company is created at the membership time if:
(a) the membership time is not a * changeover time for the head company; and
(b) the deferred loss company ' s * final RUNL just before the membership time (as reduced by any reductions under section 715-50 or 715-55 ) was greater than nil; and
(c) the deferred loss company does not satisfy the *business continuity test for:
(i) the period (the business continuity test period ) consisting of the deferred loss company ' s * trial year; and
(ii) the time (the test time ) just before the * changeover time.
Note 1:
The 170-D deferred losses become those of the head company at the formation time because of section 701-5 (Entry history rule).
Note 2:
Paragraph (3)(b) has the effect that if the deferred loss company has other 165-CC tagged assets affected by section 715-50 or 715-55 (because the membership time is when the group comes into existence, and the other 165-CC tagged assets are membership interests in, or accounting liabilities owed by, another group member), those sections are applied before this section.
715-360(4)
When it is created because of subsection (3), the pool consists of each 170-D deferred loss covered by subsection (2), and its loss denial balance is equal to the * final RUNL referred to in paragraph (3)(b).
Note:
The pool is distinct from any other loss denial pool of the head company, for example, one created under this section because another entity becomes a subsidiary member of the group at the membership time.
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