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INCOME TAX ASSESSMENT ACT 1997 - SECT 713.25 Undistributed, realised profits that accrue to joined group before joining time and could be distributed tax free--step 3 in working out allocable cost amount

INCOME TAX ASSESSMENT ACT 1997 - SECT 713.25

Undistributed, realised profits that accrue to joined group before joining time and could be distributed tax free--step 3 in working out allocable cost amount

  (1)   For the purposes of step 3 in the table in section   705 - 60, if the joining entity is a trust, the step 3 amount is the sum of the trust's realised profits, to the extent that:

  (a)   they accrued to the joined group before the joining time (as defined in subsection   705 - 90(7)); and

  (b)   as at the joining time, they have not been distributed to * members of the trust; and

  (c)   if each of them were distributed as mentioned in paragraphs 705 - 90(7)(a) and (b):

  (i)   they would be distributed otherwise than in respect of a unit or an interest in the trust; or

  (ii)   their non - assessable parts for the purposes of section   104 - 70 would be disregarded in working out whether or not a * capital gain had been made because of CGT event E4;

except to the extent that they recouped losses of any * sort that accrued to the joined group before the joining time (as defined in subsection   705 - 90(8)).

Note:   If the joining entity, or an entity interposed between the head company and the joining entity, is a non - fixed trust, this section may involve determining how a power of appointment would have been exercised. Section   713 - 50 lists matters to have regard to in determining this.

Trusts not covered

  (2)   Subsection   (1) does not apply to a trust that is a * corporate tax entity at the joining time.

Note:   This excludes corporate unit trusts and public trading trusts, which are covered by the imputation system.

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