INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 701 - Core rules  

Supporting provisions  

SECTION 701-61   Assets in relation to Division 230 financial arrangement - head company's assessable income or deduction  

701-61(1)  
This section applies if:


(a) an entity (the joining entity ) becomes a *subsidiary member of a *consolidated group; and


(b) paragraph 701-55(5A)(b) applies in relation to one or more assets of the joining entity.

701-61(2)  
Work out if the total of the *Division 230 starting values for those assets exceeds or falls short of the total of their *tax cost setting amounts.

701-61(3)  
If there is an excess, an amount equal to 25% of that excess is included in the *head company's assessable income for:


(a) the income year in which the particular time mentioned in subsection 701-55(5A) occurs; and


(b) each of the 3 subsequent income years.

701-61(4)  
If there is a shortfall, the *head company is entitled to a deduction equal to 25% of that shortfall for:


(a) the income year in which the particular time mentioned in subsection 701-55(5A) occurs; and


(b) each of the 3 subsequent income years.


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