New Business Tax System (Consolidation and Other Measures) Act (No. 1) 2002 (117 of 2002)

Schedule 5   Consolidation: allocable cost amount for a joining trust

Part 2   Consequential amendment

Income Tax Assessment Act 1997

7   Section 705-60 (table item 3)

Repeal the item, substitute:

3

Add to the result of step 2 the step 3 amount worked out under:

(a) section 705-90, which is about undistributed, frankable profits accruing to the joined group before the joining time; or

(b) if the joining entity is a trust (and not a*corporate tax entity) - section 713-25, which is about undistributed, realised profits accruing to the joined group before the joining time that could be distributed tax free in respect of discretionary interests

To increase the allocable cost amount:

(a) to reflect the undistributed, taxed profits and so prevent double taxation; or

(b) if the joining entity is a trust - to reflect the undistributed, realised profits that could be distributed tax free in respect of discretionary interests