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-J - Entry history rule and choices  

Head company's choice overriding entry history rule

SECTION 715-660   Head company ' s choice overriding entry history rule  

Application

715-660(1)  


This section has effect if an entity becomes a * subsidiary member of a * consolidated group at a time (the joining time ) and either:


(a) the question whether the entity had made a choice (however described) under a provision (the choice provision ) listed in the table was relevant to working out the entity ' s liability (if any) for income tax, or the entity ' s loss (if any) of a particular * sort, calculated by reference to an income year starting before the joining time; or


(b) before the joining time, the entity made a choice that:


(i) is described in paragraph (a); and

(ii) would, if the entity had not become a subsidiary member of a consolidated group, have started to have effect for working out the entity ' s liability (if any) for income tax, or the entity ' s loss (if any) of a particular * sort, calculated by reference to the first income year starting after the joining time.


List
Item Provision Subject of provision
1 A provision of Part X of the Income Tax Assessment Act 1936 for an irrevocable declaration, election, choice or selection Attribution of income in respect of controlled foreign companies
2 A provision of Subdivision 420-D that provides for a choice Valuing *registered emissions units
3 Item 1 of the table in subsection 960-60(1) Choosing to use an *applicable functional currency
3A section 230-210 , 230-255 , 230-315 or 230-395 Choice about treatment of gains and losses from *Division 230 financial arrangement
4 A provision that: Choice about a matter described in the regulations
(a) provides for a choice (however described); and
(b) is a provision of regulations made for the purposes of this Act, other than this item; and
(c) is prescribed by regulations made for the purposes of this item

Note:

Declarations, elections and selections made under the choice provision by the entity are all examples of choices under that provision (even though the provision does not call them choices), because the entity has chosen to make them.

Objects

715-660(2)  
The main objects of this section are:


(a) to override section 701-5 (Entry history rule) in relation to a choice (however described) by the entity under the choice provision or the absence of such a choice; and


(b) to extend, in some cases, the time for the * head company of the * consolidated group to make a choice (however described) under the choice provision after the joining time; and


(c) to modify, in some cases, the time at which such a choice by the head company starts to have effect. Overriding the entry history rule

715-660(3)  
For the head company core purposes set out in section 701-1 (Single entity rule), ignore a choice (however described) made by the entity under the choice provision or the absence of such a choice. Extension of time for head company to make choice

715-660(4)  
If:


(a) because of:


(i) the fact that the entity became a * subsidiary member of the * consolidated group; and

(ii) section 701-1 (Single entity rule);
the question whether the * head company of the group has made a choice (however described) under the choice provision becomes relevant for the head company core purposes set out in that section; and


(b) there is a limit (outside this section) on the period within which the head company may make such a choice;

the head company has until the later of these times to make such a choice:


(c) the last time the head company may make the choice (apart from this subsection);


(d) the end of 90 days after the Commissioner is given notice under Division 703 that the entity has become a * member of the group or, if the Commissioner allows a later time for the purposes of this paragraph, that later time. When head company ' s choice starts to have effect

715-660(5)  
If the * head company of the * consolidated group makes a choice (however described) under the choice provision as a result of becoming able to make the choice because the entity became a * subsidiary member of the group at the joining time, the choice starts to have effect:


(a) at the joining time; or


(b) if the choice relates (explicitly or implicitly) to one or more whole income years - for the income year in which the joining time occurs.

Note:

Subsection (5) has effect whether or not subsection (4) contributed to the head company becoming able to make the choice.

Relationship with other provisions

715-660(6)  
Section 701-5 (Entry history rule) and the choice provision have effect subject to this section.


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