Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 715.15

  (1)   The object of this Subdivision is to give effect to the purposes of Subdivision   165 - CC (about change of ownership or control of a company that has an unrealised net loss) in these cases:

  (a)   on formation of a * consolidated group, a * CGT asset held directly by the * head company is affected by that Subdivision, and the * business continuity test is failed;

  (b)   on an entity becoming a * subsidiary member of a consolidated group, an asset consisting of:

  (i)   a * membership interest that a * member of the group (including a chosen transitional entity under Division   701 of the Income Tax (Transitional Provisions) Act 1997 ) holds in the entity; or

  (ii)   a liability that the entity owes to such a member;

    is affected by that Subdivision, and the business continuity test is failed;

  (c)   on a company becoming a subsidiary member:

  (i)   a CGT asset of the company that becomes an asset of the head company is affected by that Subdivision; and

  (ii)   because the company is a chosen transitional entity, the asset does not have its tax cost reset; and

  (iii)   the business continuity test is failed;

  (d)   on an entity ceasing to be a subsidiary member, a CGT asset of the head company that becomes an asset of the entity is affected by that Subdivision, and the business continuity test is failed.

Note:   Subdivision   165 - CC also affects an entity that has deferred losses under Subdivision   170 - D on assets that it formerly owned. Subdivision   715 - D gives effect to the purposes of Subdivision   165 - CC if such an entity becomes a member of a consolidated group.

  (2)   This Subdivision achieves its object by supplementing and modifying the application of Subdivision   165 - CC to take account of how the rest of this Part treats * members of a * consolidated group (in particular the provisions about entities becoming or ceasing to be members).