Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section has effect for the head company core purposes when the entity becomes a * subsidiary member of the group.
Assets to which section applies
(2) This section applies in relation to each asset that becomes an asset of the * head company because subsection 701‑1(1) (the single entity rule) applies.
Object
(3) The object of this section (and Division 705 which relates to it) is to recognise the cost to the * head company of such assets as an amount reflecting the group’s cost of acquiring the entity.
Setting tax cost of assets
(4) Each asset’s * tax cost is set at the time the entity becomes a * subsidiary member of the group at the asset’s * tax cost setting amount.
Multiple setting of tax cost for same trading stock
(5) However, if:
(a) the asset is * trading stock; and
(b) the asset’s * tax cost is set by this section at more than one time (each of which is a setting time ) for the same income year;
then, except where subsection (6) applies, only the amount at which the tax cost is set at the last of the setting times is to be taken into account.
(6) If:
(a) the * head company’s * terminating value for the asset; or
(b) the * value of the asset at the start of the income year;
is required to be worked out for one or more occasions when an entity (whether or not the same entity) ceases to be a * subsidiary member of the group in the income year, then the amount at which the asset’s * tax cost is set by this subsection at a particular setting time is only taken into account in working out the head company’s terminating value for a particular occasion if:
(c) the setting time occurs before the occasion; and
(d) there is no intervening setting time or occasion.
Excluded assets
(7) If an asset is an excluded asset under subsection 705‑35(2), its * tax cost is not set.
Note: Excluded assets are assets such as entitlements to tax deductions.