Income Tax Assessment Act 1997



Division 705 - Tax cost setting amount for assets where entities become subsidiary members of consolidated groups  

Subdivision 705-A - Basic case: a single entity joining an existing consolidated group  

How to work out the allocable cost amount

SECTION 705-62   No double counting of amounts in allocable cost amount  

The object of this section is to prevent a particular amount from being taken into account more than once in calculating the *allocable cost amount for the joining entity, in order to promote the object of this Subdivision set out in section 705-10 .

Subsection (3) applies if, apart from this section, 2 or more provisions of this Act operate with the result of altering:

(a) the *allocable cost amount for the joining entity; or

(b) the allocable cost amount for another entity that becomes a *subsidiary member of the group at the joining time;

because of a particular economic attribute of the joining entity (see subsection (6)).

Only one of those alterations is to be made, as follows:

(a) if the *head company of the group makes a choice in accordance with subsections (4) and (5) - the alteration specified in the choice is to be made;

(b) otherwise - the alteration that is most appropriate (in the light of the object of this Subdivision) is to be made.

A choice mentioned in paragraph (3)(a) must be made:

(a) by the day the *head company of the group lodges its *income tax return for the income year in which the joining time occurs; or

(b) within a further time allowed by the Commissioner.

A choice mentioned in paragraph (3)(a) must be made in writing.

The economic attributes of the joining entity mentioned in subsection (2) include the following:

(a) the joining entity's retained profits;

(b) the joining entity's distributions of profits to other entities;

(c) the joining entity's realised and unrealised losses;

(d) the joining entity's deductions;

(e) the joining entity's accounting liabilities (within the meaning of subsection 705-70(1) );

(f) consideration received by the joining entity for issuing *membership interests in itself.

View surrounding sectionsView surrounding sectionsBack to top

This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.