Income Tax (Transitional Provisions) Act 1997
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Hide history noteThis section applies if an entity ceases to be a subsidiary member of the transitional group and the requirements of subsections (2) to (4) are satisfied.
Asset held at leaving time
701-40(2)
Just before the entity ceases to be a subsidiary member, it must, disregarding subsection 701-1(1) (the single entity rule) of the Income Tax Assessment Act 1997 , hold an asset.
Reduction of asset ' s tax cost setting amount for over-depreciation
701-40(3)
When the transitional group came into existence:
(a) the asset must have become that of the head company of the transitional group because subsection 701-1(1) of that Act applied in relation to a transitional entity; and
(b) former section 705-50 of that Act must have reduced by an amount (the reduction amount ) the tax cost setting amount for the asset.
Asset held continuously within group
701-40(4)
The asset must, disregarding subsection 701-1(1) of that Act, have been held at all times by the head company or a subsidiary member of the transitional group from when the transitional group came into existence until the entity ceases to be a subsidiary member of the transitional group.
701-40(5)
(Repealed by No 56 of 2010)
Head company ' s choice
701-40(6)
If this section applies, the head company may, in relation to the entity ' s ceasing to be a subsidiary member, choose that the terminating value for the asset, that is to be used in applying step 1 of the table in section 711-20 of the Income Tax Assessment Act 1997 , is increased by so much of the reduction amount as the head company chooses.
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