Tax Laws Amendment (2006 Measures No. 1) Act 2006 (32 of 2006)

Schedule 2   Business related costs

Part 2   CGT amendments

Income Tax Assessment Act 1997

41   At the end of section 110-35


(7) The sixth is search fees relating to a *CGT asset.

(8) The seventh is the cost of a conveyancing kit (or a similar cost).

(9) The eighth is borrowing expenses (such as loan application fees and mortgage discharge fees).

(10) The ninth is expenditure that:

(a) is incurred by the *head company of a *consolidated group to an entity that is not a *member of the group; and

(b) reasonably relates to a *CGT asset *held by the head company; and

(c) is incurred because of a transaction that is between members of the group.

Example: Land is transferred by one company to another company. The companies are members of a consolidated group. Stamp duty is payable as a result of the transaction.

The transaction has no taxation consequences because of its intra-group nature.

The stamp duty is included in the cost base and reduced cost base of the land.

Note: Intra-group assets are not held by the head company because of the operation of subsection 701-1(1) (the single entity rule). An example of an intra-group asset is a debt owed by a member of the consolidated group to another member of the group.