New Business Tax System (Consolidation and Other Measures) Act 2003 (16 of 2003)

Schedule 1   Consolidation: amendments of various cost base provisions

Part 4   Adjustment to allocable cost amount for certain pre-joining time roll-overs from foreign residents

Income Tax Assessment Act 1997

14   After section 705-90

Insert:

705-93 If pre-joining time roll-over from foreign resident company - step 3A in working out allocable cost amount

When there is a step 3A amount

(1) For the purposes of step 3A in the table in section 705-60, there is a step 3A amount if:

(a) before the joining time:

(i) there was a roll-over under Subdivision 126-B (a Subdivision 126-B roll-over ) in relation to a *CGT event that happened in relation to an asset (the roll-over asset ); or

(ii) section 160ZZO of the Income Tax Assessment Act 1936 applied in relation to a disposal (a section 160ZZO roll-over ) of an asset (also the roll-over asset ); and

(b) the originating company in relation to the Subdivision 126-B roll-over, or the transferor in relation to the section 160ZZO roll-over, was a foreign resident; and

(c) the recipient company in relation to the Subdivision 126-B roll-over, or the transferee in relation to the section 160ZZO roll-over, was an Australian resident and was not the entity that became the *head company of the joined group; and

(d) between the Subdivision 126-B roll-over, or the section 160ZZO roll-over, and the joining time, no other CGT event happened in relation to the roll-over asset for which there was not a Subdivision 126-B roll-over or a section 160ZZO roll-over; and

(e) the roll-over asset is not a *pre-CGT asset at the joining time; and

(f) the roll-over asset becomes that of the head company of the joined group because subsection 701-1(1) (the single entity rule) applies when the joining entity becomes a *subsidiary member of the group.

What the step 3A amount is

(2) The step 3A amount is:

(a) if, as a result of the Subdivision 126-B roll-over mentioned in subparagraph (1)(a)(i), or the section 160ZZO roll-over mentioned in subparagraph (1)(a)(ii), a *capital loss of the originating company was disregarded or a capital loss of the transferor was not incurred - an increase amount equal to the capital loss; or

(b) if, as a result of the Subdivision 126-B roll-over mentioned in subparagraph (1)(a)(i), or the section 160ZZO roll-over mentioned in subparagraph (1)(a)(ii), a *capital gain of the originating company was disregarded or a capital gain of the transferor did not accrue - a reduction amount equal to the capital gain.


Copyright notice

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).