Taxation Laws Amendment Act (No. 8) 2003 (107 of 2003)

Schedule 2   Various amendments relating to consolidated groups

Part 5   Transitional adjustment to over-depreciation provisions where no unfranked or partly franked dividends

Income Tax (Transitional Provisions) Act 1997

13   Subsection 701-30(3)

Repeal the subsection, substitute:

Creation of, or increase in, tax deferral amount

(3) For the purposes of applying section 705-50 (reduction in tax cost setting amount for over-depreciated assets) of the Income Tax Assessment Act 1997 in relation to an asset of the transitional entity that becomes that of the head company under subsection 701-1(1) of that Act when the transitional group comes into existence:

(a) if, before the transitional group came into existence, the transitional entity paid any dividends to which paragraph 705-50(2)(b) of that Act applies - the tax deferral amount in relation to the dividends under subsection 705-50(3) of that Act is increased by the amount worked out under subsection (4) of this section; and

(b) if paragraph (a) does not apply - the transitional entity is taken to have paid dividends to which paragraph 705-50(2)(b) of that Act applies and there is taken to be a tax deferral amount in relation to the dividends under subsection 705-50(3) of that Act whose amount is worked out under subsection (4) of this section.