Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 170 - Treatment of certain company groups for income tax purposes  

Subdivision 170-D - Transactions by a company that is a member of a linked group  

Operative provisions

SECTION 170-280   What happens if certain events happen in respect of the asset  

170-280(1)  


This section applies if, as a result of the occurrence of a new event in respect of a *CGT asset, the originating company is taken by subsection 170-275(1) to have made a *capital loss or to be entitled to a deduction and, within 4 years after the occurrence of the new event, one of the following events ( further events ) occurs:


(a) the asset or a greater than 50% interest in it is *acquired by the originating company or by an entity that, at the time of the acquisition, is:


(i) a company that is a member of the *linked group of which the originating company is a member; or

(ii) a connected entity of the originating company; or

(iii) an *associate of such a connected entity;


(b) a company that owns the asset or a greater than 50% interest in it becomes a member of the linked group of which the originating company is a member;


(c) the originating company becomes a member of a linked group another member of which owns the asset or a greater than 50% interest in it;


(d) an entity that owns the asset or a greater than 50% interest in it becomes:


(i) a connected entity of the originating company; or

(ii) an associate of such a connected entity.

170-280(1A)  


If the originating company has information from which it would be reasonable to conclude that, if the *CGT asset involved were owned by the originating company immediately after the further event, *majority underlying interests in the asset immediately after the further event would not have been had by *ultimate owners who had majority underlying interests in the asset immediately before the deferral event, the further event is taken not to have occurred.

170-280(2)  
The company is taken not to have made the *capital loss or not to have been entitled to the deduction, as the case may be.

170-280(3)  


If, at a time after the further event, any one or more of the following events (the realisation events ) happens:


(a) the *CGT asset referred to in subsection (1) (the relevant CGT asset ), or a greater than 50% interest in it, ceases to exist;


(b) the relevant CGT asset, or a greater than 50% interest in it, is *acquired by an entity that is none of the following:


(i) a member of the linked group of which the originating company is a member;

(ii) a connected entity of the originating company;

(iii) an *associate of such a connected entity;


(c) if the relevant CGT asset is acquired by a company that is a member of that linked group - that company ceases to be a member of that linked group;


(d) the originating company ceases to be a member of that linked group;


(e) if the relevant CGT asset is acquired by an entity that is a connected entity of the originating company or is an associate of such a connected entity - that entity ceases to be such a connected entity or ceases to be an associate of such a connected entity, as the case may be;

the originating company is taken, immediately before the time of the happening of the realisation event or the earliest of the realisation events, as the case may be, to have made a *capital loss equal to the amount of the capital loss referred to in subsection (2) or to have become entitled to a deduction equal to the deduction referred to in that subsection, as the case may be.

170-280(4)  
If the *capital loss referred to in subsection (2) would have been made from a *personal use asset or from a *collectable, any corresponding capital loss that the originating company is taken by subsection (3) to have made is taken to have been made from a personal use asset or from a collectable, as the case may be.


 

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