| Disclaimer This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law. You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of your private ruling
Authorisation Number: 1012558787594
Ruling
Subject: Corporate restructure
Question 1
Pursuant to subsection 703-70(1) of the ITAA 1997, will the income tax consolidated group be taken not to have ceased to exist as the company must choose under subsection 124-380(5) of the ITAA 1997 for the income tax consolidated group to continue to exist with the company as the new head company?
Answer
Yes.
Question 2
Does the Commissioner agree that the company will inherit the trust's identity and tax history for the part of the income year that ends before the completion time?
Answer
Yes.
Question 3
Will the entity and its Australian wholly owned subsidiaries each become a 'subsidiary member' of the income tax consolidated group pursuant to subsection 703-15(2) of the ITAA 1997 at the time the head company becomes registered as the holder of the ordinary shares by virtue of the application of section 703-33 of the ITAA 1997?
Answer
Yes.
Question 4
Will the entity and its Australian wholly owned subsidiaries each be taken to be a 'subsidiary member' of the income tax consolidated group for the whole of the day of joining for head company and entity core purposes under section 701-1 of the ITAA 1997?
Answer
Yes.
Question 5
Does Subdivision 705-C of the ITAA 1997 apply to the entity and its Australian wholly owned subsidiaries when they join the income tax consolidated group?
Answer
Yes.
Question 6
Will the modified same business test under section 707-125 of the ITAA 1997 be satisfied in order for all the entity tax losses and net capital losses to be transferred by the entity to the income tax consolidated group under Subdivision 707-A of the ITAA 1997?
Answer
Yes.
Question 7
For the purposes of the available fraction calculation pursuant to Subdivision 707-C of the ITAA 1997, will the available fraction for all the entity tax losses and net capital loss be equal to 1 at the joining time?
Answer
Yes.
Question 8
Will the loan from the trust to the company constitute a 'debt interest' of the company under Division 974 of the ITAA 1997?
Answer
Yes.
Question 9
Does the Commissioner agree that the trust is not a 'connected entity' of the company at the time that the loan is entered into?
Answer
Yes.
Question 10
Will the loan from the trust to the company be a financial arrangement under section 230-45 of the ITAA 1997?
Answer
Yes.
Question 11
If the answer to Question 10 is yes, will the interest expense incurred by the company in respect of the loan be deductible on an accruals basis in accordance with the accruals method under section 230-100 of the ITAA 1997?
Answer
Yes.
Question 12
If the answer to Question 10 is yes, will subsection 230-20(4) of the ITAA 1997 apply to prevent the overall loss made by the company in relation to the loan from the trust from being allowed as an allowable deduction under other provisions outside of Division 230 of the ITAA 1997 for the same or any other income year?
Answer
Yes.
Question 13
Does the Commissioner agree that there is no reasonable basis to issue a determination to the company, pursuant to the provisions in Part IVA of the ITAA 1936, in connection with a scheme comprising of all or some of the steps in the restructure?
Answer
Yes.
This ruling applies for the following periods:
Income year ending 30 June 20xx
The scheme commences on:
During the income year ending 30 June 20xx
Relevant facts and circumstances
The taxpayer has applied for a private ruling in relation to matters concerning a corporate restructure.
Relevant legislative provisions
Income Tax Assessment Act 1997
Section 108-5
Section 110-25
Section 112-30
Section 124-365
Section 124-380
Section 165-12
Section 165-15
Section 230-20
Section 230-45
Section 230-100
Section 230-105
Section 230-115
Section 701-1
Section 701-10
Section 701-30
Section 701-60
Section 703-5
Section 703-15
Section 703-20
Section 703-25
Section 703-30
Section 703-33
Section 703-70
Section 703-75
Section 703-80
Section 705-35
Section 705-175
Section 707-120
Section 707-140
Section 707-210
Section 707-320
Section 960-130
Section 960-135
Section 974-5
Section 974-20
Section 974-35
Section 974-75
Section 974-80
Section 974-130
Section 974-135
Section 974-160
Subsection 995-1(1)
Income Tax Assessment Act 1936
Division 6 of Part III
Division 6C of Part III
Section 102P
Part IVA
Section 318
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
