INCOME TAX ASSESSMENT ACT 1997 - SECT 709.175 Head company is former exempting entity
INCOME TAX ASSESSMENT ACT 1997 - SECT 709.175
Head company is former exempting entity(1) Subsection (2) operates if:
(a) the * head company of a * consolidated group is a * former exempting entity; and
(b) a * corporate tax entity becomes a * subsidiary member of the group at a time (also the joining time ); and
(c) the entity is an * exempting entity at the joining time.
(2) These rules apply to the * consolidated group.
Rules applying to * consolidated group | |
Item | Rule |
1 | There is no change to the status of the * head company |
2 | If the subsidiary member's * franking account has a * franking surplus at the joining time: (a) a debit equal to that surplus arises in that account at the joining time; and (b) a credit equal to that surplus arises in the * exempting account of the * head company at the joining time |
3 | Subsection 709 - 60(2) (about franking surplus) does not apply to the * subsidiary member |
Note 1: If the subsidiary's franking account is in deficit, it will be liable for franking deficit tax: see subsection 709 - 60(3).
Note 2: The subsidiary's franking account does not operate while it is a member of the group: see section 709 - 65.
(3) Subsection (4) operates if:
(a) the * head company of a * consolidated group is a * former exempting entity; and
(b) a * corporate tax entity becomes a * subsidiary member of the group at a time (also the joining time ); and
(c) the entity is a * former exempting entity at the joining time.
(4) These rules apply to the * consolidated group.
Rules applying to * consolidated group | |
Item | Rule |
1 | There is no change to the status of the * head company |
2 | If the * subsidiary member's * exempting account has an * exempting surplus at the joining time: (a) a debit equal to that surplus arises in that account at the joining time; and (b) a credit equal to that surplus arises in the exempting account of the * head company at the joining time |
3 | If the * subsidiary member's * exempting account has an * exempting deficit at the joining time: (a) a credit equal to that deficit arises in that account at the joining time; and (b) a debit equal to that deficit arises in the subsidiary's * franking account just before the joining time |
4 | The * subsidiary member's * exempting account does not operate during the period: (a) starting just after the joining time; and (b) ending when the entity ceases to be a subsidiary member of the group |
Note 1: If the subsidiary's franking account is in deficit, it will be liable for franking deficit tax: see subsection 709 - 60(3). This deficit may be increased by item 3 in the table in subsection (4).
Note 2: The subsidiary's franking account does not operate while it is a member of the group: see section 709 - 65.
(5) There is no change to the status of the * head company of a * consolidated group if:
(a) the head company is a * former exempting entity; and
(b) a * corporate tax entity becomes a * subsidiary member of the group; and
(c) the entity is neither an * exempting entity nor a former exempting entity at the joining time.
Note 1: If the subsidiary's franking account is in surplus, that surplus will be transferred to the head company's franking account: see subsection 709 - 60(2).
Note 2: If the subsidiary's franking account is in deficit, it will be liable for franking deficit tax: see subsection 709 - 60(3).
Note 3: The subsidiary's franking account does not operate while it
is a member of the group: see section 709 - 65.