Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-90
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CONSOLIDATED GROUPS
Division 705
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Tax cost setting amount for assets where entities become subsidiary members of consolidated groups
Subdivision 705-D
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Where multiple entities are linked by membership interests
Modified application of Subdivision 705-A
SECTION 705-230 Adjustments to restrict step 4 reduction of allocable cost amount to effective distributions to head company in respect of direct membership interests
Object
705-230(1)
The object of this section is to ensure that, in working out the group's * allocable cost amount for the linked entities, the reduction under step 4 in the table in section 705-60 (about pre-formation time distributions out of certain profits) is made only for profits that have been effectively distributed to the * head company in respect of its direct * membership interests in the entities. This ensures consistency with the ordering rule in section 705-225 .
When section applies
705-230(2)
This section applies to a distribution to the extent that the following conditions are satisfied:
(a) the distribution is made by a linked entity;
(b) in working out the group's * allocable cost amount for the linked entity there would, apart from this section, be a reduction under step 4 in the table in section 705-60 for the distribution.
Step 4 reduction only if subject distribution is made to head company
705-230(3)
There is no reduction as mentioned in subsection (2) for the distribution unless it is made to the * head company of the group.
View history note
Hide history noteSECTION 705-230 Adjustments to restrict step 4 reduction of allocable cost amount to effective distributions to head company in respect of direct membership interests
Object
705-230(1)
The object of this section is to ensure that, in working out the group's * allocable cost amount for the linked entities, the reduction under step 4 in the table in section 705-60 (about pre-formation time distributions out of certain profits) is made only for profits that have been effectively distributed to the * head company in respect of its direct * membership interests in the entities. This ensures consistency with the ordering rule in section 705-225 .
When section applies
705-230(2)
This section applies to a distribution to the extent that the following conditions are satisfied:
(a) the distribution is made by a linked entity;
(b) in working out the group's * allocable cost amount for the linked entity there would, apart from this section, be a reduction under step 4 in the table in section 705-60 for the distribution.
Step 4 reduction only if subject distribution is made to head company
705-230(3)
There is no reduction as mentioned in subsection (2) for the distribution unless it is made to the * head company of the group.
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