Income Tax Assessment Act 1997
Subsection (1) applies to an accounting liability to the extent that it is a liability of a kind described in:
(a) paragraph 705-70(1AC)(c) ; or
(b) paragraph 705-70(1AC)(d) .
If some or all of an accounting liability will result in a deduction to the *head company, the amount to be added for the accounting liability under subsection 705-70(1) is reduced by the following amount:
|[ Deduction||×||*Corporate tax rate]||-||Double-counting adjustment|
means the amount of any reduction that has already occurred in the accounting liability under subsection 705-70(1) to take account of the future availability of the deduction.
If the amount of an accounting liability of the joining entity that is owed to a *member of the joined group is more than the amount applicable under the following table, the amount to be added for the accounting liability under subsection 705-70(1) instead equals the amount applicable under the table.
|Item||If the market value of the member ' s asset constituted by the accounting liability is ...||The amount applicable is ...|
|1||equal to or greater than the asset ' s *cost base||the asset ' s cost base|
|2||less than the asset ' s *cost base but greater than its *reduced cost base||the asset ' s *market value|
|3||less than or equal to the asset ' s *reduced cost base||the asset ' s reduced cost base|
Subsections 705-65(2) , (3), (3AA) and (3A) apply in relation to references in subsection (2) of this section to an asset ' s *cost base or *reduced cost base in a corresponding way to that in which they apply in relation to references in the table in subsection 705-65(1) to a *membership interest ' s cost base or reduced cost base.
Subsection 705-65(4) applies in relation to assets mentioned in subsection (2) of this section in a corresponding way to that in which it applies in relation to members ' *membership interests.
(a) in working out the *reduced cost base of a *member ' s asset for the purposes of subsection (2), a reduction has taken place under subsection 165-115ZA(3) (about alterations in ownership or control of loss companies); and
(b) the reduction is to some extent attributable to so much of an amount that was taken into account both in working out the amount of the reduction and in working out:
(i) the step 5 amount under section 705-100 ; or
(ii) the step 6 amount under section 705-110 ;
the reduced cost base is, to the extent mentioned in paragraph (b), increased by:
(c) if subparagraph (b)(i) applies - the amount of that reduction; or
(d) if subparagraph (b)(ii) applies - the amount of that reduction multiplied by the *corporate tax rate.