Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 170 - Treatment of certain company groups for income tax purposes  

Subdivision 170-D - Transactions by a company that is a member of a linked group  

Operative provisions

SECTION 170-255   Application of Subdivision  

170-255(1)  
This Subdivision applies if:


(a) an event (the deferral event ) happens involving a company (the originating company ) and another entity; and


(b) one or more of the following apply:


(i) the deferral event is a *CGT event that would have resulted in the originating company making a *capital loss (except a capital loss that would be disregarded under a provision of this Act other than this Subdivision);

(ii) the deferral event would have resulted in the originating company becoming entitled to a deduction in respect of the disposal of a CGT asset or of an interest in a CGT asset;

(iii) if the originating company is a partner in a partnership - the deferral event would have resulted in the partnership becoming entitled to a deduction in respect of the disposal of a CGT asset or of an interest in a CGT asset; and


(c) if subparagraph (b)(i) applies - the CGT event is one of the following:


(i) CGT events A1 and B1 (a disposal case );

(ii) CGT events D1, D2, D3 and F1 (a creation case ); and
Note:

The full list of CGT events is in section 104-5 .


(d) one of the following applies:


(i) the originating company is an Australian resident at the time of the deferral event;

(ii) if the deferral event is a CGT event D1 - the *CGT asset that is the subject of the creation of the contractual or other rights is *taxable Australian property;

(iii) if the deferral event is a CGT event A1, B1 or F1 - the asset or the subject of the lease, as the case may be, was *taxable Australian property immediately before the deferral event;

(iv) if the deferral event is a CGT event D2 - the option was *taxable Australian property immediately after the deferral event;

(v) if subparagraph (b)(ii) or (iii) applies - the originating company is a foreign resident at the time of the deferral event; and


(e) at the time of the deferral event, the originating company is a member of a *linked group and one of the following applies:


(i) the other entity is a company that is not a connected entity of the originating company and is a member of that linked group;

(ii) the other entity is a connected entity of the originating company;

(iii) the other entity is an *associate of such a connected entity.

170-255(2)  
Despite subsection (1):


(a) this Subdivision does not apply because of *CGT event B1 if title in the *CGT asset does not pass to the other entity when the agreement ends; and


(b) this Subdivision does not apply if the deferral event involves the *acquisition of a greater than 50% interest in a CGT asset by an entity other than an entity referred to in subparagraph (1)(e)(i), (ii) or (iii).


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