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 820-457 (ARCHIVE)   Income year includes, but does not start on, cut-off day  

820-457(1)    
This section applies if:

(a) the income year includes, but does not start on, the cut-off day; and

(b) the top entity makes the choice referred to in section 820-455 .

820-457(2)    
This Subdivision (except sections 820-455 to 820-458 ) applies to each of the potential group members as if the income year ended immediately before the cut-off day.

820-457(3)    
If the cut-off day is before 1 July 2003, this Subdivision (except sections 820-455 to 820-458 ) has an additional application to each of the potential group members on the following basis:

(a) the income year is treated as consisting of the period starting on the cut-off day and ending on 30 June 2003, or on the day when the income year would otherwise have ended, whichever is earlier;

(b) the *resident TC group is treated as consisting only of each (if any) of the potential group members that, at no time before or during that period, was a *member of a *consolidated group or *MEC group.

820-457(4)    
For each of the potential group members, for each of the following periods:

(a) the period starting at the start of the income year and ending immediately before the cut-off day;

(b) if the cut-off day is before 1 July 2003:

(i) the period referred to in paragraph (3)(a);

(ii) the rest (if any) of the income year;

(c) if the cut-off day is 1 July 2003 - the period starting on the cut-off day and ending at the end of the income year;

this Division (except sections 820-455 to 820-458 ) is to have either:

(d) a single application in relation to the whole of the period; or

(e) 2 or more applications, each in relation to a part of that period.

Note:

If the cut-off day is the consolidation day, this section complements provisions ensuring that, for the potential group members, this Division has at least one separate application to the part of the income year before the consolidation day:

• in the case of subsidiary members of a consolidated group or MEC group, this result is achieved by paragraph 701-30(3)(a) ; and

• in the case of the head company of the consolidated group or MEC group, it is achieved by section 820-581 .

Section 820-581 sets out an example of how that section works. The example discusses how that section interacts with this one, and illustrates the operation of provisions like subsection (4) of this section.