Tax Laws Amendment (2010 Measures No. 1) Act 2010 (56 of 2010)

Schedule 5   Consolidation

Part 16   Loss multiplication rules for widely held companies

Income Tax Assessment Act 1997

148A   After section 715-260

Insert:

715-265 Head company does not have relevant equity or debt interest in a loss company if widely held top company does not have such an interest

(1) For the purposes of Subdivision 165-CD, treat the *head company of a *consolidated group as not having a relevant equity interest in a *loss company at a particular time if:

(a) the head company is an *eligible tier-1 company of a *top company at that time; and

(b) the top company is a *widely held company at that time; and

(c) because of subsections 165-115X(2A), (2B) and (2C), the top company does not have a relevant equity interest under section 165-115X in the loss company at that time.

(2) For the purposes of paragraph (1)(c), disregard the operation of subsection 701-1(1) (the single entity rule) in determining whether subsection 165-115X(2C) has the effect that the *top company has the relevant equity interest mentioned in that paragraph.

(3) For the purposes of Subdivision 165-CD, treat the *head company of a *consolidated group as not having a relevant debt interest in a *loss company at a particular time if:

(a) the head company is an *eligible tier-1 company of a *top company at that time; and

(b) the top company is a *widely held company at that time; and

(c) because of subsections 165-115Y(3A), (3B) and (3C), the top company does not have a relevant debt interest under section 165-115Y in the loss company at that time.