Tax Laws Amendment (2010 Measures No. 1) Act 2010 (56 of 2010)

Schedule 5   Consolidation

Part 4   No double counting of amounts in ACA

Income Tax Assessment Act 1997

36   After section 705-60

Insert:

705-62 No double counting of amounts in allocable cost amount

(1) The object of this section is to prevent a particular amount from being taken into account more than once in calculating the *allocable cost amount for the joining entity, in order to promote the object of this Subdivision set out in section 705-10.

(2) Subsection (3) applies if, apart from this section, 2 or more provisions of this Act operate with the result of altering:

(a) the *allocable cost amount for the joining entity; or

(b) the allocable cost amount for another entity that becomes a *subsidiary member of the group at the joining time;

because of a particular economic attribute of the joining entity (see subsection (6)).

(3) Only one of those alterations is to be made, as follows:

(a) if the *head company of the group makes a choice in accordance with subsections (4) and (5) - the alteration specified in the choice is to be made;

(b) otherwise - the alteration that is most appropriate (in the light of the object of this Subdivision) is to be made.

(4) A choice mentioned in paragraph (3)(a) must be made:

(a) by the day the *head company of the group lodges its *income tax return for the income year in which the joining time occurs; or

(b) within a further time allowed by the Commissioner.

(5) A choice mentioned in paragraph (3)(a) must be made in writing.

(6) The economic attributes of the joining entity mentioned in subsection (2) include the following:

(a) the joining entity's retained profits;

(b) the joining entity's distributions of profits to other entities;

(c) the joining entity's realised and unrealised losses;

(d) the joining entity's deductions;

(e) the joining entity's accounting liabilities (within the meaning of subsection 705-70(1));

(f) consideration received by the joining entity for issuing *membership interests in itself.