Income Tax Assessment Act 1997



Division 715 - Interactions between this Part and other areas of the income tax law  

Subdivision 715-K - Exit history rule and choices  

Choices leaving entity can make ignoring exit history rule

SECTION 715-700   Choices leaving entity can make ignoring exit history rule  


This section has effect if:

(a) an entity ceases to be a * subsidiary member of a * consolidated group at a time (the leaving time ); and

(b) the question whether the * head company of the group had made a choice (however described) under a provision (the choice provision ) listed in the table in subsection 715-660(1) was relevant to working out that company ' s liability (if any) for income tax, or the entity ' s loss (if any) of a particular * sort, calculated by reference to an income year starting before the leaving time.


Declarations, elections and selections made under the choice provision at the option of a company are all examples of choices under that provision (even though it does not call them choices) because the company has chosen to make them.


The main objects of this section are:

(a) to override section 701-40 (Exit history rule) and let the entity make a choice (however described) under the choice provision with effect after the leaving time; and

(b) to extend, in some cases, the time for the entity to make such a choice after the leaving time; and

(c) to modify, in some cases, the rules about when such a choice by the entity starts to have effect. Overriding the exit history rule

For the entity core purposes set out in section 701-1 (Single entity rule) relating to income years ending after the leaving time, ignore a choice (however described) made by the * head company of the * consolidated group under the choice provision or the absence of such a choice. Fresh choice by the entity

The entity may make a choice (however described) under the provision if the question whether the entity has made such a choice is relevant to working out the entity ' s liability (if any) for income tax, or loss (if any) of a particular * sort, calculated by reference to an income year ending after the leaving time. Extension of time for fresh choice by the entity

If there is a time limit (apart from this subsection) on the entity making such a choice, the entity has until the later of these times to make the choice:

(a) the last time it may make the choice under the provision (apart from this section);

(b) the end of 90 days after the leaving time or, if the Commissioner allows a later time for the purposes of this paragraph, that later time. Start of effect of choice

If the entity makes a choice because of this section, the choice starts to have effect:

(a) at the leaving time; or

(b) if the choice relates (explicitly or implicitly) to one or more whole income years - for the income year in which the leaving time occurs. Relationship with other provisions

Section 701-40 (Exit history rule) and the choice provision have effect subject to this section.


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