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

Schedule 6   Consolidation: losses

Part 3   Effect of exit history rule

Income Tax Assessment Act 1997

5   At the end of Subdivision 707-D

Add:

707-410 Exit history rule does not treat entity as having made a loss

(1) To avoid doubt, if the*head company of a*consolidated group makes a loss of a particular*sort and an entity ceases to be a*subsidiary member of the group, the entity isnot taken because of section 701-40 (the exit history rule):

(a) to have made the loss; or

(b) to have made another loss of the same sort because of the circumstances that caused the head company to make the loss.

(2) It does not matter whether the*head company makes the loss because of a transfer under Subdivision 707-A (whether from the entity or another entity) or because of another provision.