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-W - Effect on arrangements where CGT roll-overs are obtained  

SECTION 715-920   Effect on restructures - original entity is a head company that becomes a subsidiary member of another group  

715-920(1)    
This section applies if:

(a) section 124-784A applies in relation to an *arrangement; and

(b) the original entity (within the meaning of that section) for the arrangement is the *head company of a *consolidated group (the acquired group ) just before the arrangement was completed; and

(c) as a result of the arrangement:

(i) the original entity; and

(ii) the *subsidiary members of the acquired group just before the arrangement was completed;

become subsidiary members of another consolidated group.

Note:

Sections 124-784A and 124-784B apply to arrangements for restructures.

715-920(2)    
For the purposes of section 124-784B :

(a) the original entity is taken to be the *head company of the acquired group at the completion time (within the meaning of that section) for the *arrangement; and

(b) the operation of this Part for the head company core purposes (mentioned in subsection 701-1(2) ) in relation to:

(i) the original entity; and

(ii) the entities that were *subsidiary members of the acquired group just before the arrangement was completed;

continue to have effect at the completion time for the arrangement; and

(c) the completion time for the arrangement is taken to be the time the original entity becomes a member of the other group; and

(d) disregard Division 701 (Core rules) in relation to the original entity becoming a member of the other group.

Note:

Paragraph (b) means that, for the purposes of section 124-784B , the subsidiary members of the acquired group are treated as part of the original entity.

715-920(3)    
The *head company of the other group may choose for:

(a) section 701-10 (cost to head company of assets of joining entity); and

(b) subsection 701-35(4) (setting value of trading stock at tax-neutral amount); and

(c) subsection 701-35(5) (setting value of registered emissions unit at tax-neutral amount);

not to apply to the original entity's assets in respect of the original entity becoming a *subsidiary member of the other group.

Note:

This subsection does not affect the application of subsection 701-1(1) (the single entity rule).