Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 715 - Interactions between this Part and other areas of the income tax law  

Subdivision 715-F - Interactions with Division 230 (financial arrangements)  

SECTION 715-379   Cost setting on leaving - amount of intragroup liability that is Division 230 financial arrangement  

715-379(1)    
Subsection (2) applies if:

(a) an entity (the leaving entity ) ceases to be a *subsidiary member of a *consolidated group at a time (the leaving time ); and

(b) a thing (the accounting liability ) is, in accordance with *accounting standards, or statements of accounting concepts made by the Australian Accounting Standards Board:

(i) a liability of the leaving entity at the leaving time that can or must be recognised in the entity ' s statement of financial position; or

(ii) a liability of the *head company of the group at the leaving time that can or must be recognised in the head company ' s statement of financial position; and

(c) because subsection 701-1(1) (the single entity rule) ceases to apply to the leaving entity at the leaving time:

(i) if subparagraph (b)(i) applies - the accounting liability becomes a liability of the leaving entity, and an asset (the corresponding asset ) that consists of the liability becomes an asset of the head company; or

(ii) if subparagraph (b)(ii) applies - the accounting liability becomes a liability of the head company, and an asset (the corresponding asset ) that consists of the liability becomes an asset of the leaving entity; and

(d) the corresponding asset ' s *tax cost is set at the leaving time under:

(i) if subparagraph (b)(i) applies - section 701-20 ; or

(ii) if subparagraph (b)(ii) applies - section 701-45 ; and

(e) the accounting liability is or is part of a *Division 230 financial arrangement.

715-379(2)    
For the purposes of Division 230 of this Act and Schedule 1 to the Tax Laws Amendment (Taxation of Financial Arrangements) Act 2009 :

(a) if subparagraph (1)(b)(i) applies - treat the leaving entity as starting to have the accounting liability at the leaving time for receiving a payment equal to the *tax cost setting amount of the corresponding asset; or

(b) if subparagraph (1)(b)(ii) applies - treat the *head company as starting to have the accounting liability at the leaving time for receiving a payment equal to the tax cost setting amount of the corresponding asset.

Note:

The tax cost setting amount of the corresponding asset is determined under sections 701-60 and 701-60A .