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  • Notification forms and instructions

    The head company of a group must notify the ATO of its decision to consolidate (forming a group) by the time it lodges the group's first consolidated income tax return.

    The head company must also notify the ATO, within 28 days, when members join or leave the group and when the head company itself is no longer eligible to be a head company (and the group therefore ceases to exist).

    Special notification requirements apply to the formation and membership of multiple entry consolidated (MEC) groups.

    These instructions will help taxpayers and their advisers to complete the relevant paper notification form or, where available, the relevant online or electronic lodgment service (ELS) screen. They also contain links to the forms (available for download in portable document format (PDF) and online screens).

    Forming a group

    The head company or its tax agent can notify of the formation of a consolidated group by completing and lodging a Notification of formation of an income tax consolidated group form. Alternatively the tax agent can notify of formation when lodging an income tax return via ELS.

    Do not use this form for MEC groups.

    • The head company must notify the ATO of the group's formation by the time it lodges its first consolidated income tax return - or, if a return is not required, by the date it would otherwise be due. For example, notification of a group consolidating on 1 July 2002 must be made by the lodgment date for the 2002-03 income tax return.
    • Submitting the notification two or three weeks before the first consolidated income tax return is lodged, while not mandatory, will allow the ATO to update its records for the group and ensure the return is correctly processed.
    • Consolidation cannot be reversed - once an effective choice to consolidate is notified the choice to consolidate cannot be revoked and the date of consolidation cannot be changed.

    Head company and date

    Part 1 Consolidation details

    The head company must:

    • be an Australian resident (but not a prescribed dual resident) company
    • not be a subsidiary member of a consolidated or consolidatable group, and
    • have at least some of its taxable income (if it has any) taxed at the general company tax rate.

    Get the date right

    'Your chosen date of consolidation' is the date of effect of consolidation, not the date on which you notify the ATO.

    The head company – at the date of effect – chooses the date (though the earliest possible date is 1 July 2002) and notifies the ATO.

    Get the date right before lodging the notification, as once you notify us of your choice, the date of consolidation cannot be changed.

    Note that the head company at the date of consolidation may no longer be the head company at the date of notification.

    Declaration

    Part 2 Declaration

    The notification must be authorised and signed by the head company's public officer or tax agent.

    The date in this section of the form is the notification date (that is, the date on which the form is signed and lodged) not the date of consolidation.

    To avoid delays in processing, ensure the authorised person is currently recognised as such with the ATO.

    Contact details will be used to contact the head company, if required, about the notification only. This can be the person who signed the declaration or any other nominated person such as the finance manager.

    Phone the Business tax enquiries line to add this person as a permanent contact for consolidation purposes.

    Subsidiary members

    All eligible subsidiary members of the group must be listed in parts 3 or 4.

    At part 3, list only the entities that are members at the date of notification.

    Part 3 Subsidiary member/s joining

    At part 4, list any entities that were members of the group at the date of consolidation but have since left.

    Part 4 Subsidiary member/s leaving

    One in, all in

    All eligible members of the group at the date of effect of consolidation must be included in the notification. A choice to consolidate is binding on all eligible members – you may not leave an eligible member out of the group. Therefore, check that the notification contains all eligible members at the date of consolidation regardless of the length of membership in the group.

    An entity is a subsidiary member of a consolidatable group if:

    • it is a company, trust or partnership
    • it is wholly owned, directly or indirectly, by the head company (disregarding up to 1% of ordinary shares that meet certain employee share scheme requirements)
    • it is an Australian resident (but not a prescribed dual resident)
    • if the member is a company - it has at least some of its taxable income (if it has any) taxed at the general company tax rate (if it is a company).

    Trusts are considered wholly owned only if all beneficiaries are also members of the group. Do not include trusts that distribute to non-group members (including individuals).

    Where a trust is a member, show the tax file number (TFN) of the trust as part of its details, not the TFN of the trustee. If the trustee is also a member (for example, a corporate trustee), include its details separately.

    Where a partnership is a subsidiary member of a group, show the TFN of the partnership as part of its details, not the TFNs of the partners. The partners will also be members, so their details including TFNs are included separately.

    Do not include

    Do not include companies that are deregistered at the date of effect of consolidation. If a company is registered at the date of effect but has been subsequently deregistered it must be included (at part 4) regardless of its trading status. A subsidiary company to which a liquidator has been appointed, but which has not been deregistered at the date of effect of consolidation, must be included.

    Certain types of company cannot be a head company or subsidiary member and certain types of trust cannot be a subsidiary member. In particular, a non-profit company can be a head company but not a subsidiary member of a consolidated group. Superannuation funds generally cannot be a head company or subsidiary member.

    See also:

    Download a notification form

    Checklist

    1. Check you have included all but only your eligible members.
    2. Advise the ATO of any legal name changes before lodging your notification.
    3. Include the correct TFNs and legal names for the head company and subsidiary members. While it is not mandatory to quote a TFN, not including it may delay processing.
    4. Lodge the notification at any time from the date of effect up to the lodgment date for the head company's first consolidated income tax return or, if a return is not required, the date on which it would have otherwise been due. If possible, lodge it at least two or three weeks before you lodge your first consolidated income tax return.
    5. Fully understand the implications of consolidating before you notify. Once you notify the ATO, your choice to consolidate cannot be reversed and the date of consolidation can't be changed if an effective choice to consolidate has been notified.

    What happens after you lodge your notification?

    You will receive a confirmation letter when your notification of formation or a change in group membership or head company status has been successfully processed. This letter will show group status and membership at the date of effect.

    The ATO is not responsible for checking the validity of your notification, although it may be subject to a review if any details appear inconsistent.

    Income tax returns

    Consolidation provides for the head company to lodge a single income tax return on behalf of the entire consolidated group. A subsidiary member will need to lodge a return only for any non-consolidation periods in an income year (for example, if the date of effect is part way through an income year). For more information on PAYG instalments and income tax returns refer to sections B3-2 'Paying PAYG instalments' and B3-3 'Determining annual liability' of the Consolidation reference manual.

    Members joining or leaving an existing group

    The head company or its former public officer (if the head company no longer exists) must notify the ATO within 28 days of an entity joining or leaving the consolidated group. Where this happens more than 28 days before the group's formation is notified, notice must be given as part of the formation notification (on parts 3 and 4 of the formation notification form respectively).

    To notify the ATO of a member joining or leaving an existing group, download and complete the Notification of members joining and/or leaving the group form. Alternatively, the head company's tax agent can use ELS.

    Do not use this form for MEC groups.

    Authorisation and eligibility requirements for notifying of an entity joining or leaving a group are the same as those applying to forming a group.

    In the same way that all eligible entities must be included in the formation notification, when an entity becomes eligible to be a subsidiary member of an existing consolidated group it automatically joins the group and must be included in the notification. Similarly, where an entity is no longer eligible (for example, on disposal of some or all of its membership interests) it automatically leaves the group.

    Notification of continuation of a consolidated group with a new interposed head company

    For prudential reasons, authorised deposit-taking institution (ADI) groups may restructure and interpose a non-operating holding company as the new head company of the group, making the ADI a wholly-owned subsidiary. Where the non-operating holding company makes a choice that a consolidated group is to continue in existence, with the interposed company as the new head company, it is required to notify the ATO.

    The new head company, or its tax agent, should notify the ATO by completing and lodging the following form within 28 days of becoming the head company of the group:

    Head company no longer eligible (consolidated group ceases to exist)

    The head company or its former public officer (if it no longer exists) must notify the ATO within 28 days of the head company becoming ineligible to be a head company. Where this happens more than 28 days before the group's formation is notified to the ATO, notice must be given at the same time as notification of the choice to consolidate.

    When the head company becomes ineligible, the group ceases to exist.

    To notify the ATO of the head company becoming ineligible, download and complete the Notification of head company no longer eligible: group ceases to exist form. Authorisation requirements are the same as those applying to forming a group.

    Do not use this form for MEC groups.

    Dealing with errors in calculating tax cost setting amounts

    Current requirements

    From 1 August 2007, where a head company becomes aware that one or more errors were made in working out the tax costing setting amounts of reset cost base assets of a subsidiary member, and it would be unreasonable to require recalculation of the amounts, the head company will be required to notify the Commissioner of the errors as soon as practicable.

    The relevant notification form must be completed and sent to the ATO in order to satisfy this requirement. There are separate notification forms for consolidated groups and MEC groups.

    What is required to be reported?

    The amount to be reported is the aggregate overstated or aggregate understated amount of the error(s) for the group. If the aggregate amount is nil, there is still an administrative requirement for the head company to lodge an approved form. This way the ATO can keep a record that the head company has notified the Commissioner of the errors.

    Previous requirements

    Prior to 1 August 2007, when a head company discovered that it had made one or more errors in calculating the tax cost setting amount, the head company was required to keep a written record that it had made the errors, and the overstated or understated amount, so that it would be available on request. No notification to the Commissioner was required.

    Following consultation with industry during its review of Draft Taxation Ruling TR 2006/D12 Income tax: consolidation: errors in tax cost setting amounts of reset cost base assets, the ATO accepted the Rulings Panel advice that a change of practice was necessary to ensure the administrative treatment for dealing with errors in the calculation of tax cost setting amounts properly reflects the legislative requirements where it would be unreasonable to require the recalculation of the amounts.

    These changes are addressed in Taxation Ruling TR 2007/7 'Income tax: consolidation: errors in tax cost setting amounts of reset cost base assets'.

    Lodging the error notification form

    The head company of a consolidated group, or its tax agent, can notify the ATO of errors discovered in the calculation of the tax cost setting amounts by completing and lodging the Notification of error(s) in the calculation of tax cost setting amounts - Consolidated group form as soon as practicable after becoming aware of the error(s).

    For MEC groups, the provisional head company, or its tax agent, should notify by completing and lodging the Notification of error(s) in the calculation of tax cost setting amounts - Multiple entry consolidated (MEC) group form.

    Total capital gain or loss greater than $10,000

    Where the head company's total current year capital gains for the income year or total current year capital losses for the income year are greater than $10,000, the head company is required to complete the Capital Gains Tax (CGT) schedule.

    Notification forms for consolidated groups

    Notification forms for multiple entry consolidated groups

    A MEC group is a group of Australian entities that is wholly foreign-owned and does not have a common Australian resident head company. Formation of a MEC group and certain other events must be notified to the ATO on the following downloadable paper forms:

    Alternatively, a tax agent can notify via ELS, but must also post to the ATO a nomination of provisional head company, signed by all eligible tier one companies, which is included as part 5 of the MEC formation form (NAT 7024). Notification will not be processed until this nomination is received.

    For information on the notifiable events and the use of the various forms refer to section C10-1-110 'MEC groups - notifiable events' in the Consolidation reference manual. Section C10 as a whole contains detailed information on the rules for MEC groups.

    More information

    • For assistance with completing any of the consolidation notification forms, please phone the ATO Registrations Info Line on 1300 130 902.
    • Information on how to make other enquiries can be found on our contacts page.

    See also:

      Last modified: 01 Feb 2017QC 27145