Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 715 - Interactions between this Part and other areas of the income tax law  

Subdivision 715-A - Treatment of unrealised losses existing when ownership or control of a company changes before or during consolidation  

165-CC tagged assets that form loss denial pools of head company when consolidated group is formed

SECTION 715-60   Assets that the head company already owns  

715-60(1)    
At the time (the formation time ) when a ^* consolidated group comes into existence under paragraph 703-5(1)(a) , a loss denial pool of the ^* head company is created if:

(a) the formation time is not a ^* changeover time for the head company; and

(b) at the formation time, the head company owns a ^* CGT asset:

(i) that is a ^* 165-CC tagged asset of the head company at that time; and

(ii) that it owned at the ^* changeover time; and

(iii) that is not a ^* membership interest in a ^* member of the group; and

(iv) that is not a right or option (including a contingent right or option), created or issued by a member of the group, to acquire such a membership interest; and

(v) that is not constituted by a liability owed to the head company by a member of the group;

or 2 or more such assets; and

(c) the head company ' s ^* final RUNL just before the formation time (as reduced by any reductions under section 715-50 or 715-55 ) was greater than nil; and

(d) the head company does not satisfy the *business continuity test for:

(i) the period (the business continuity test period ) consisting of the head company ' s ^* trial year; and

(ii) the time (the test time ) just before the ^* changeover time.

Note:

Paragraph (1)(c) has the effect that if the head company has 165-CC tagged assets that are affected by section 715-50 or 715-55 (because they are membership interests in, or accounting liabilities owed by, another group member), those sections are applied before this section.

715-60(2)    
When it is created, the pool consists of the one or more ^* CGT assets referred to in paragraph (1)(b), and its loss denial balance is equal to the ^* final RUNL referred to in paragraph (1)(c).

Note 1:

The pool is distinct from any other loss denial pool of the head company, for example, one created at the formation time under section 715-70 .

Note 2:

170-D deferred losses on 165-CC tagged assets of the head company may be added to the pool by subsection 715-355(1) .