Tax Laws Amendment (2012 Measures No. 2) Act 2012 (99 of 2012)

Schedule 3  

Part 1   Pre rules

Income Tax Assessment Act 1997

6   After section 701-61

Insert:

701-63 Asset forming part of goodwill, right to future income, etc.

(1) Subsection (2) applies if an entity (the joining entity ) became a subsidiary member of a *consolidated group at a time (the joining time ).

(2) For the purposes of this Part (other than this section):

(a) treat goodwill of a business of the joining entity as a single asset; and

(b) treat an asset of that business of the joining entity that is an *asset forming part of goodwill as being part of that single asset; and

(c) as a result of paragraph (b), do not treat an asset of that business of the joining entity that is an asset forming part of goodwill as a separate asset.

(3) An asset forming part of goodwill means any of the following:

(a) an intangible asset, the value of which is attributable to expected future profits from *life insurance policies or *general insurance policies;

(b) a customer relationship asset, know-how asset or other accounting intangible asset, that is not any of the following:

(i) a *CGT asset;

(ii) a *revenue asset;

(iii) a *depreciating asset;

(iv) *trading stock;

(v) a thing that is or is part of a *Division 230 financial arrangement;

(vi) goodwill;

(vii) an excluded asset for the purposes of section 705-35;

(c) a *non-deductible right to future income.

(4) A non-deductible right to future income is a *right to future income that is not an *unbilled income asset.

(5) A right to future income is a valuable right (including a contingent right) to receive an amount for the performance of work or services or the provision of goods if:

(a) the valuable right forms part of a contract or agreement; and

(b) the *market value of the valuable right (taking into account all the obligations and conditions relating to the right) is greater than nil; and

(c) the valuable right is neither a *Division 230 financial arrangement nor part of a Division 230 financial arrangement.

(6) An asset that is a *right to future income is an unbilled income asset if:

(a) the asset:

(i) is in respect of work (but not goods) that has been performed, or partially performed, by an entity for another entity; or

(ii) is in respect of goods (other than *trading stock) or services that have been provided, by an entity to another entity; and

(b) a recoverable debt has not yet arisen in respect of the work, goods or services.