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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS    View history reference

Division 701 - Core rules    View history reference

Head company rules  

SECTION 701-10  Cost to head company of assets of joining entity  

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701-10(1)  

This section has effect for the head company core purposes when the entity becomes a *subsidiary member of the group.

Assets to which section applies

701-10(2)  

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This section applies in relation to each asset that would be an asset of the entity at the time it becomes a *subsidiary member of the group, assuming that subsection 701-1(1) (the single entity rule) did not apply.

Note:

See subsection 705-35(3) for the treatment of a goodwill asset resulting from the head company's ownership and control of the joining entity.

Object

701-10(3)  

The object of this section (and Division 705 which relates to it) is to recognise the cost to the *head company of such assets as an amount reflecting the group's cost of acquiring the entity.

Setting tax cost of assets

701-10(4)  

Each asset's *tax cost is set at the time the entity becomes a *subsidiary member of the group at the asset's *tax cost setting amount.

Multiple setting of tax cost for same trading stock or registered emissions unit

701-10(5)  

However, if:


(a) the asset is *trading stock or a *registered emissions unit; and
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(b) the asset's *tax cost is set by this section at more than one time (each of which is a setting time) for the same income year;

then, except where subsection (6) applies, only the amount at which the tax cost is set at the last of the setting times is to be taken into account.

701-10(6)  

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If:


(a) the *head company's *terminating value for the asset; or


(b) the *value of the asset at the start of the income year;

is required to be worked out for one or more occasions when an entity (whether or not the same entity) ceases to be a *subsidiary member of the group in the income year, then the amount at which the asset's *tax cost is set by this section at a particular setting time is only taken into account in working out the head company's terminating value for a particular occasion if:


(c) the setting time occurs before the occasion; and


(d) there is no intervening setting time or occasion.

701-10(7)  

(Repealed by No 99 of 2012)


 



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