INCOME TAX ASSESSMENT ACT 1997 - SECT 715.920 Effect on restructures--original entity is a head company that becomes a subsidiary member of another group

INCOME TAX ASSESSMENT ACT 1997 - SECT 715.920

  (1)   This section applies if:

  (a)   section   124 - 784A applies in relation to an * arrangement; and

  (b)   the original entity (within the meaning of that section) for the arrangement is the * head company of a * consolidated group (the acquired group ) just before the arrangement was completed; and

  (c)   as a result of the arrangement:

  (i)   the original entity; and

  (ii)   the * subsidiary members of the acquired group just before the arrangement was completed;

    become subsidiary members of another consolidated group.

Note:   Sections   124 - 784A and 124 - 784B apply to arrangements for restructures.

  (2)   For the purposes of section   124 - 784B:

  (a)   the original entity is taken to be the * head company of the acquired group at the completion time (within the meaning of that section) for the * arrangement; and

  (b)   the operation of this Part for the head company core purposes (mentioned in subsection   701 - 1(2)) in relation to:

  (i)   the original entity; and

  (ii)   the entities that were * subsidiary members of the acquired group just before the arrangement was completed;

    continue to have effect at the completion time for the arrangement; and

  (c)   the completion time for the arrangement is taken to be the time the original entity becomes a member of the other group; and

  (d)   disregard Division   701 (Core rules) in relation to the original entity becoming a member of the other group.

Note:   Paragraph   (b) means that, for the purposes of section   124 - 784B, the subsidiary members of the acquired group are treated as part of the original entity.

  (3)   The * head company of the other group may choose for:

  (a)   section   701 - 10 (cost to head company of assets of joining entity); and

  (b)   subsection   701 - 35(4) (setting value of trading stock at tax - neutral amount); and

  (c)   subsection   701 - 35(5) (setting value of registered emissions unit at tax - neutral amount);

not to apply to the original entity's assets in respect of the original entity becoming a * subsidiary member of the other group.

Note:   This subsection does not affect the application of subsection   701 - 1(1) (the single entity rule).