Commonwealth Consolidated Acts

NEW BUSINESS TAX SYSTEM (CONSOLIDATION) ACT (NO. 1) 2002

TABLE OF PROVISIONS

   1.      Short title  
   3.      Schedule(s)  
   4.      Amendment of income tax assessments  

   PART 3-90--CONSOLIDATED GROUPS

           Division 700--Guide and objects

   700.1.  What this Part is about  
   700.5.  Overview of this Part  
   700.10. Objects of this Part  

           Division 701--Core rules

   701.1.  Single entity rule  
   701.5.  Entry history rule  
   701.10. Cost to head company of assets that entity brings into group  
   701.15. Cost to head company of membership interests in entity that leaves group  
   701.20. Cost to head company of assets consisting of certain liabilities owed by entity that leaves group  
   701.25. Tax-neutral consequence for head company of ceasing to hold assets when entity leaves group  
   701.30. Where entity not subsidiary member for whole of income year  
   701.35. Tax-neutral consequence for entity of ceasing to hold assets when it joins group  
   701.40. Exit history rule  
   701.45. Cost of assets consisting of liabilities owed to entity by members of the group  
   701.50. Cost of certain membership interests of which entity becomes holder on leaving group  
   701.55. Setting the tax cost of an asset  
   701.60. Tax cost setting amount  
   701.65. Net income and losses for trusts and partnerships  
   701.70. Adjustments to taxable income where identities of parties to arrangement merge on joining group  
   701.75. Adjustments to taxable income where identities of parties to arrangement re-emerge on leaving group  
   701.80. Accelerated depreciation  
   701.85. Other exceptions etc. to the rules  

           Division 703--Consolidated groups and their members

   703.1.  What this Division is about  
   703.5.  What is a consolidated group?  
   703.10. What is a consolidatable group?  
   703.15. Members of a consolidated group or consolidatable group  
   703.20. Certain entities that cannot be members of a consolidated group or consolidatable group  
   703.25. Australian residence requirements for trusts  
   703.30. When is one entity a wholly-owned subsidiary of another?  
   703.35. Treating entities as wholly-owned subsidiaries by disregarding employee shares  
   703.40. Treating entities held through non-fixed trusts as wholly-owned subsidiaries  
   703.45. Entities interposed between the head company and a subsidiary member of a consolidated group  
   703.50. Choice to consolidate a consolidatable group  
   703.55. Creating consolidated groups from certain MEC groups  
   703.60. Notice of events affecting consolidated group  

           Division 705--Tax cost setting amount for assets where entities become subsidiary members of consolidated groups

   705.1.  What this Division is about  

              Subdivision 705-A--Basic case

   705.5.  What this Subdivision is about  
   705.10. Application and object of this Subdivision  
   705.15. Cases where this Subdivision does not have effect  
   705.20. Tax cost setting amount worked out under this Subdivision  
   705.25. Tax cost setting amount for retained cost base assets  
   705.30. What is the joining entity’s terminating value for an asset?  
   705.35. Tax cost setting amount for reset cost base assets  
   705.40. Reduction in tax cost setting amount for revenue assets  
   705.45. Reduction in tax cost setting amount for accelerated depreciation assets  
   705.50. Reduction in tax cost setting amount for over-depreciated assets  
   705.55. Order of application of sections 705-40, 705-45 and 705-50  
   705.60. What is the joined group’s allocable cost amount for the joining entity?  
   705.65. Cost of membership interests in the joining entity—step 1 in working out allocable cost amount  
   705.70. Liabilities of the joining entity—step 2 in working out allocable cost amount  
   705.75. Liabilities of the joining entity—reductions for purposes of step 2 in working out allocable cost amount  
   705.80. Liabilities of the joining entity—reductions/increases for purposes of step 2 in working out allocable cost amount  
   705.85. Liabilities of the joining entity—increases for purposes of step 2 in working out allocable cost amount  
   705.90. Undistributed, frankable profits accruing to joined group before joining time—step 3 in working out allocable cost amount  
   705.95. Pre-joining time distributions out of certain profits—step 4 in working out allocable cost amount  
   705.100.Losses accruing to joined group before joining time—step 5 in working out allocable cost amount  
   705.105.Continuity of holding membership interests—steps 3 to 5 in working out allocable cost amount  
   705.110.If joining entity transfers a loss to the head company—step 6 in working out allocable cost amount  
   705.115.If head company becomes entitled to certain deductions—step 7 in working out allocable cost amount  
   705.120.Preservation of application of Subdivision 165-CC (about unrealised losses)  

              Subdivision 165-CC--becomes potentially applicable to proportion of assets acquired by head company

   705.125.Pre-CGT factor for assets of joining entity  

           Division 707--Losses for head companies when entities become members etc

              Subdivision 707-A--Transfer of previously unutilised losses to head company

   707.100.What this Subdivision is about  
   707.105.Who can utilise the loss?  
   707.110.Objects of this Subdivision  
   707.115.What losses this Subdivision applies to  
   707.120.Transfer of loss from joining entity to head company  
   707.125.Modified same business test for companies’ post-1999 losses  
   707.130.Modified pattern of distributions test  
   707.135.Transferring loss transferred to joining entity because same business test was passed  
   707.140.Effect of transfer of loss  
   707.145.Cancelling the transfer of the loss  
   707.150.Loss cannot be utilised for income year ending after the joining time  

              Subdivision 707-B--Can a transferred loss be utilised

   707.200.What this Subdivision is about  
   707.205.Modified period for test for maintaining same ownership  
   707.210.Utilisation of certain losses transferred from a company depends on company that made the losses earlier  

              Subdivision 707-C--Amount of transferred losses that can be utilised

   707.300.What this Subdivision is about  
   707.305.Object of this Subdivision  
   707.310.How much of a transferred loss can be utilised?  
   707.315.What is a bundle of losses?  
   707.320.What is the available fraction for a bundle of losses?  
   707.325.Modified market value of an entity becoming a member of a consolidated group  
   707.330.Losses transferred from former head company  
   707.335.Limit on utilising transferred losses if circumstances change during income year  
   707.340.Utilising transferred losses while exempt income remains  
   707.345.Other provisions are subject to this Subdivision  

              Subdivision 707-D--Special rules about losses

   707.400.Head company’s business before and after consolidation not compared  
   707.405.Modified operation of other provisions  

           Division 709--Other rules applying when entities become subsidiary members etc

              Subdivision 709-A--Franking accounts

   709.50. What this Subdivision is about  
   709.55. Object of this Subdivision  
   709.60. Nil balance franking account for joining entity  
   709.65. Subsidiary member’s franking account does not operate  
   709.70. Credits arising in head company’s franking account  
   709.75. Debits arising in head company’s franking account  
   709.80. Subsidiary member’s distributions on employee shares taken to be distributions by head company  
   709.85. Non-share distributions by subsidiary members taken to be distributions by head company  

           Division 711--Tax cost setting amount for membership interests where entities cease to be subsidiary members of consolidated groups

   711.1.  What this Division is about  
   711.5.  Application and object of this Division  
   711.10. Tax cost setting amount worked out under this Division  
   711.15. Tax cost setting amount where no multiple exit  
   711.20. What is the old group’s allocable cost amount for the leaving entity?  
   711.25. Terminating values of assets that the leaving entity takes with it—step 1 in working out allocable cost amount  
   711.30. What is the head company’s terminating value for an asset?  
   711.35. If head company becomes entitled to certain deductions—step 2 in working out allocable cost amount  
   711.40. Liabilities owed to the leaving entity by members of the old group—step 3 in working out allocable cost amount  
   711.45. Liabilities etc. owed by the leaving entity—step 4 in working out allocable cost amount  
   711.50. Adjustment to allocable cost amount to ensure effect of Subdivision 165-CC not avoided—step 5 in working out allocable cost amount  
   711.55. Tax cost setting amount for membership interests where multiple exit  
   711.60. Membership interests treated as potentially subject to Subdivision 165-CC (about unrealised losses)  
   711.65. Membership interests treated as having been acquired before 20 September 1985—simple case  
   711.70. Membership interests treated as having been acquired before 20 September 1985—multiple exit case  

           Division 719--MEC groups

   719.1.  What this Division is about  
   719.5.  What is a MEC group?  
   719.10. What is a potential MEC group?  
   719.15. What is an eligible tier-1 company?  
   719.20. What is a top company and a tier-1 company?  
   719.25. Head company and subsidiary members of a MEC group  
   719.30. Treating entities as wholly-owned subsidiaries by disregarding employee shares  
   719.35. Treating entities held through non-fixed trusts as wholly-owned subsidiaries  
   719.40. Special conversion event—potential MEC group  
   719.45. Application of sections 703-20 and 703-25  
   719.50. Eligible tier-1 companies may choose to consolidate a potential MEC group  
   719.55. When choice starts to have effect  
   719.60. Appointment of provisional head company  
   719.65. Qualifications for the provisional head company of a MEC group  
   719.70. Income year of new provisional head company to be the same as that of former provisional head company  
   719.75. Head company  
   719.80. Notice of events affecting MEC group  
   721.1.  What this Division is about  
   721.5.  Object of this Division  
   721.10. When this Division operates  
   721.15. Head company and contributing members jointly and severally liable to pay group liability  
   721.20. Limit on liability where group first comes into existence  
   721.25. When a group liability is covered by a tax sharing agreement  
   721.30. TSA contributing members liable for contribution amounts  
   721.35. When a TSA contributing member has left the group clear of the group liability  
           SCHEDULE 2 Transitional provisions relating to main consolidation provisions
           SCHEDULE 3 Consequential amendments relating to main consolidation provisions
           SCHEDULE 4 Amendments about Pay as you go (PAYG) instalments
           SCHEDULE 5 Amendments of Dictionary