Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 705.215

Application

  (1)   This Subdivision has effect for the head company core purposes set out in subsection   701 - 1(2) if:

  (a)   2 or more entities (each of which is a linked entity ) become members of a * consolidated group at the same time as a result of an event that happens in relation to one of them; and

  (b)   the case is not covered by Subdivision   705 - C.

Note:   This is the third exception to Subdivision   705 - A: see paragraph   705 - 15(c). In order for this Subdivision to have effect, one of the entities would need to hold directly or indirectly, just before the joining time, membership interests in all of the other entities.

Example:   Entities A and B are not members of a consolidated group, but members of such a group, together with entity A, jointly hold all the membership interests in entity B. Members of the group then acquire all the membership interests in entity A and as a result of this event both entities, which are linked by the membership interests that one holds in the other, become members of the group.

Object

  (2)   The object of this Subdivision is to modify the rules in Subdivision   705 - A (which basically determine the tax cost setting amount for assets of an entity joining an existing consolidated group) so that they take account of the different circumstances that apply where linked entities join.