INCOME TAX ASSESSMENT ACT 1997 (ARCHIVE)

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 820 - Thin capitalisation rules  

Subdivision 820-F - Thin capitalisation rules for resident TC groups  

Operative provisions

SECTION 820-455 (ARCHIVE)   Removal of grouping under this Subdivision  

820-455(1)    
This section and sections 820-456 to 820-458 affect the making, by the *top entity of a *maximum TC group for an income year, of a choice under section 820-500 for the income year if:

(a) the choice would result in entities (the potential group members ) for which the income year ends on the same day being treated as a *resident TC group for the income year; and

(b) the income year includes, or starts after, the day (the cut-off day ) worked out under the table.

Note:

If the top entity can and does make the choice, subsection 820-458(1) affects a foreign bank's ability to choose under paragraph 820-515(c) to include its Australian permanent establishments in the resident TC group.

Cut-off day for thin capitalisation grouping
Item	In this case:	The cut-off day is:
1	The first day (the consolidation day ) on which at least one of the potential group members becomes a *member of a *consolidated group or *MEC group is on or before 1 July 2003	the consolidation day
2	The consolidation day is before 1 July 2004 and is the first day of the first income year starting after 30 June 2003 of the group's *head company (for a *consolidated group) or *provisional head company (for a *MEC group) on the consolidation day	the consolidation day
3	Any other case	1 July 2003

820-455(2)    
The *top entity cannot make the choice if:

(a) the cut-off day is before 1 July 2003 and the income year starts on or after 1 July 2003; or

(b) the cut-off day is on or after 1 July 2003 and the income year starts on or after the cut-off day.

Note:

This means that the top entity can make the choice in a case covered by item 2 of the table in subsection (1) if the income year ends immediately before the one described in that item. In these circumstances neither of sections 820-456 and 820-457 will apply.