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

Schedule 5   Consolidation

Part 1   Use of the tax cost setting amount

2   Division 2 - Foreign currency gains and losses

Income Tax Assessment Act 1997

6   After Subdivision 715-D

Insert:

Subdivision 715-E - Interactions with Division 775 (Foreign currency gains and losses)

Table of sections

715-370 Cost setting - reference time for determining currency exchange rate effect

715-370 Cost setting - reference time for determining currency exchange rate effect

(1) This section applies if:

(a) an entity (the joining entity ) becomes a *subsidiary member of a *consolidated group at a time (the joining time ); and

(b) taking into account the operation of subsection 701-1(1) (the single entity rule), the *head company of the group held an asset at the joining time because the joining entity became a subsidiary member of the group; and

(c) the asset is a reset cost base asset at the joining time (within the meaning of section 705-35); and

(d) in working out the asset's *tax cost setting amount, the currency exchange rate of a particular *foreign currency is taken into account in determining the *market value of the asset.

(2) For the purposes of Division 775, determine the extent of any *currency exchange rate effect after the joining time in relation to the asset, by reference to the currency exchange rate for the *foreign currency at the joining time.