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-K - Exit history rule and choices  

Choices leaving entity can make ignoring exit history rule

SECTION 715-700   Choices leaving entity can make ignoring exit history rule  

Application

715-700(1)    
This section has effect if:

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

(b) the question whether the ^* head company of the group had made a choice (however described) under a provision (the choice provision ) listed in the table in subsection 715-660(1) was relevant to working out that company ' s liability (if any) for income tax, or the entity ' s loss (if any) of a particular ^* sort, calculated by reference to an income year starting before the leaving time.

Note:

Declarations, elections and selections made under the choice provision at the option of a company are all examples of choices under that provision (even though it does not call them choices) because the company has chosen to make them.

Objects

715-700(2)    
The main objects of this section are:

(a) to override section 701-40 (Exit history rule) and let the entity make a choice (however described) under the choice provision with effect after the leaving time; and

(b) to extend, in some cases, the time for the entity to make such a choice after the leaving time; and

(c) to modify, in some cases, the rules about when such a choice by the entity starts to have effect.

Overriding the exit history rule

715-700(3)    
For the entity core purposes set out in section 701-1 (Single entity rule) relating to income years ending after the leaving time, ignore a choice (however described) made by the ^* head company of the ^* consolidated group under the choice provision or the absence of such a choice.

Fresh choice by the entity

715-700(4)    
The entity may make a choice (however described) under the provision if the question whether the entity has made such a choice is relevant to working out the entity ' s liability (if any) for income tax, or loss (if any) of a particular ^* sort, calculated by reference to an income year ending after the leaving time.

Extension of time for fresh choice by the entity

715-700(5)    
If there is a time limit (apart from this subsection) on the entity making such a choice, the entity has until the later of these times to make the choice:

(a) the last time it may make the choice under the provision (apart from this section);

(b) the end of 90 days after the leaving time or, if the Commissioner allows a later time for the purposes of this paragraph, that later time.

Start of effect of choice

715-700(6)    
If the entity makes a choice because of this section, the choice starts to have effect:

(a) at the leaving time; or

(b) if the choice relates (explicitly or implicitly) to one or more whole income years - for the income year in which the leaving time occurs.

Relationship with other provisions

715-700(7)    
Section 701-40 (Exit history rule) and the choice provision have effect subject to this section.