INCOME TAX (TRANSITIONAL PROVISIONS) ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 701 - Modified application of provisions of Income Tax Assessment Act 1997 for certain consolidated groups formed in 2002-03 and 2003-04 financial years  

Subdivision 701-B - Modified application of provisions  

SECTION 701-45   When entity leaves transitional group, head company may choose, for purposes of transitional group's allocable cost amount, to use formation time market values, instead of terminating values, for certain pre-CGT assets  

701-45(1)  
This section applies if:


(a) an entity ceases to be a subsidiary member of the transitional group; and


(b) just before the transitional group came into existence, the entity that became the head company held a pre-CGT asset; and


(c) that holding of the asset did not occur as a result of a CGT event:


(i) for which there was a roll-over under Subdivision 126-B of the Income Tax Assessment Act 1997 ; and

(ii) that occurred after 11.45 am by legal time in the Australian Capital Territory on 21 September 1999; and


(d) just before the entity ceases to be a subsidiary member of the group, the asset is still a pre-CGT asset and is held by the head company only because the entity is taken by subsection 701-1(1) (the single entity rule) of the Income Tax Assessment Act 1997 to be a part of the head company.

701-45(2)  
If this section applies, the head company may, in relation to the entity's ceasing to be a subsidiary member, choose that the terminating value for the asset, that is to be used in applying step 1 of the table in section 711-20 of the Income Tax Assessment Act 1997 , is equal to its market value just before the transitional group came into existence.


 

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