Income Tax (Transitional Provisions) Act 1997
View history note
Hide history noteDiv 701 inserted by No 90 of 2002.
Subdiv 701-B inserted by No 90 of 2002.
(Repealed by No 101 of 2006)
S 701-30 repealed as inoperative by
No 101 of 2006
, s 3 and Sch 1 item 285, effective 14 September 2006. For
application and savings provisions
see the online CCH Australian Income Tax Legislation archive. S 701-30 formerly read:
S 701-30(1) amended by No 16 of 2003, s 3 and Sch 1 item 27A (as inserted by No 56 of 2010, s 3 and Sch 5 item 138), by substituting para (a), effective 3 June 2010. A note to the amendment reads:
Section 701-30 of the
Income Tax (Transitional Provisions) Act 1997
was repealed by item 285 of Schedule 1 to the
Tax Laws Amendment (Repeal of Inoperative Provisions) Act 2006
on 14 September 2006. Therefore the amendment made by this item will not apply after that repeal. No 56 of 2010, s 3 and Sch 5 items 139 and 140 contained the following application and transitional provisions, effective 3 June 2010:
Para (a) formerly read:
S 701-30(1) and (1A) substituted for s 701-30(1) by No 16 of 2003. S 701-30(1) and (1A) substituted for s 701-30(1) by No 16 of 2003. If an entity interposed between the head company and the transitional entity is a non-fixed trust, this subsection may involve determining how a power of appointment would have been exercised. Section
713-50
of the
Income Tax Assessment Act 1997
(applying because of section
700-1
of this Act) lists matters to have regard to in determining this.
SECTION 701-30 Undistributed, untaxed pre-formation profits of non-chosen transitional entities
-
adjustment to allocable cost amount and tax cost setting amount reduction for over-depreciated assets
Section only applies to transitional groups formed at certain times
701-30(1)
This section applies if the day on which the transitional group comes into existence is before 1 July 2003 or is both:
(a)
on or before the first day of the first income year of the head company starting after 30 June 2003; and
(b)
before 1 July 2004.
Note:
139 Application provision
(1)
The amendments made apply in relation to a consolidated group or MEC group only if the head company of the group makes a choice in accordance with subitems (2) and (3).
(2)
The choice must be made:
(a)
on or before 30 June 2011; or
(b)
within a further time allowed by the Commissioner.
(3)
The choice must be made in writing.
140 Transitional provision
-
revocation of choice for transitional entities
(1)
This item applies in relation to a consolidated group or MEC group if:
(a)
the head company of the group makes a choice in accordance with subitems (2) and (3) of the previous item; and
(b)
the group came into existence:
(i)
on or after 1 July 2003; and
(ii)
on a day other than the first day of the first income year of the head company starting after 1 July 2003.
(2)
In determining whether a choice under subsection
701-5(1)
of the
Income Tax (Transitional Provisions) Act 1997
in relation to the group can be revoked, treat the reference in paragraph
701-5(4)(a)
of that Act to 31 December 2005 as instead being a reference to the day that is 6 months after the commencement of this item
[
CCH Note:
This item commenced on 3 June 2010].
(a)
the first day of the first income year of the head company starting after 30 June 2003; and
Section only applies to non-chosen transitional entities in such groups
701-30(1A)
This section applies to each transitional entity in the transitional group, other than a chosen transitional entity. This is so even if there are no chosen transitional entities at all.
Increase in step 3 of allocable cost amount on group formation
701-30(2)
The amount to be added under section
705-90
(step 3 of allocable cost amount) of the
Income Tax Assessment Act 1997
in working out the transitional group
'
s allocable cost amount for the transitional entity is increased by the additional undistributed profits (the
step 3 untaxed profits increase
) that would form part of the step 3 amount under that section if:
(a)
subsections (3) and (4) of that section were disregarded; and
(b)
it were a requirement of that section that, if any additional undistributed profits resulting from paragraph (a) of this subsection were distributed as dividends just before the group came into existence, the head company and each other transitional entity interposed between the head company and the transitional entity would be entitled to a rebate of income tax under section
46
or
46A
of the
Income Tax Assessment Act 1936
on the dividends.
Note:
S 701-30(2) amended by No 41 of 2005, No 16 of 2003, No 117 of 2002.
Creation of, or increase in, tax deferral amount
701-30(3)
For the purposes of applying section 705-50 (reduction in tax cost setting amount for over-depreciated assets) of the Income Tax Assessment Act 1997 in relation to an asset of the transitional entity that becomes that of the head company under subsection 701-1(1) of that Act when the transitional group comes into existence:
(a) if, before the transitional group came into existence, the transitional entity paid any dividends to which paragraph 705-50(2) (b) of that Act applies - the tax deferral amount in relation to the dividends under subsection 705-50(3) of that Act is increased by the amount worked out under subsection (4) of this section; and
(b) if paragraph (a) does not apply - the transitional entity is taken to have paid dividends to which paragraph 705-50(2) (b) of that Act applies and there is taken to be a tax deferral amount in relation to the dividends under subsection 705-50(3) of that Act whose amount is worked out under subsection (4) of this section.
S 701-30(3) substituted by No 107 of 2003.
Amount for purposes of paragraphs (3)(a) and (b)
701-30(4)
The amount for the purposes of paragraphs (3)(a) and (b) is equal to the amount that would have been the step 3 untaxed profits increase if the undistributed profits constituting that increase were also required to satisfy the following requirements:
(a) the profits were not subject to income tax because of deductions for the asset ' s decline in value;
(b) the decline in value represented the over-depreciation of the asset;
(c) the deductions for the decline in value do not form part of a tax loss covered by the step 5 amount mentioned in step 5 in the table in section 705-60 of the Income Tax Assessment Act 1997 in working out the transitional group ' s allocable cost amount for the transitional entity.
S 701-30(4) amended by No 107 of 2003, No 16 of 2003.
S 701-30 inserted by No 90 of 2002.
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