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  • Consolidated corporate groups form and schedule

    Eligible wholly-owned corporate groups can consolidate to form a single entity for income tax purposes. A consolidated group consists of one or more subsidiary members and the head company that is responsible for payment of income tax and PAYG instalments for the group.

    The head company must notify us of the decision to consolidate, including the date of consolidation, details of the head company and all subsidiary members -see Notification of formation of an income tax consolidated group.

    If subsidiary members join or leave the consolidated group, the head company must notify us of the changes – see Notification of members joining and/or leaving the group.

    A Consolidated group losses schedule will also need to be completed if one or more tests are met.

    Notification of formation of an income tax consolidated group

    The notification schedule can be used for two purposes:

    • It can be lodged with the head company’s first tax return to provide details of the formation of the group – the schedule will also be attached to Notification of members joining and/or leaving the group to report changes in membership.
    • as the initial notification of the formation of a consolidated group        
      • the schedule is lodged with the first tax return for the group
      • when used for this purpose, it can only be submitted once in the life of the group
      • the start date of consolidation can be any date within the income year of the income tax return being lodged
      • the schedule cannot be used to notify consolidation in a future income year.
       

    Form for notifying members joining or leaving the group

    Once the consolidated group has been established and the initial notification lodged, the head company must report all changes in membership.

    The head company must notify the ATO of new eligible members joining the group or members leaving, within 28 days. To do this, the head company must complete Notification of members joining and/or leaving the group and Notification of formation of a consolidated group.

    You do not need to list the existing members of the group, only those whose membership details have changed.

    If a member is exiting due to deregistration, you should first ensure that the subsidiary member has been formally deregistered by the Australian Securities and Investments Commission (ASIC) before lodging the form to remove the member.

    There is no limit to the number of subsidiary members' joining or leaving details that can be included on the schedule. Even if all subsidiary members exit, the group will continue to exist if the head company continues to fulfil the requirements to be the head company of a consolidated group.

    Consolidated groups losses schedule

    If one or more of the following tests are met, the head company of a consolidated group or multiple entry consolidated (MEC) group must complete the Consolidated groups losses schedule and lodge it with their company tax return.

    The tests are:

    • the total of the group’s tax losses and net capital losses carried forward to later income years is more than $100,000
    • the total of the group’s tax losses and net capital losses transferred from joining entities is more than $100,000
    • the total of the group’s tax losses deducted and net capital losses applied is more than $100,000
    • the group has an interest in a controlled foreign company (CFC) that has current year losses greater than $100,000
    • the group has an interest in a CFC that has convertible CFC losses
    • the group is a life insurance company (or is treated as a life insurance company under Subdivision 713-L of the ITAA 1997) and has complying superannuation class tax losses and net capital losses carried forward to later income years totalling more than $100,000.

    A head company may need to complete a Consolidated groups losses schedule for certain aspects of its net capital losses and a capital gains tax schedule for other aspects.

    If a head company completes a Consolidated groups losses schedule for any aspect of its losses, all relevant parts must be completed.

    Last modified: 15 Jul 2019QC 49409