NEW BUSINESS TAX SYSTEM (CONSOLIDATION AND OTHER MEASURES) ACT (NO. 1) 2002 - SCHEDULE 6

Commonwealth Consolidated Acts

- Consolidation: losses Part 1—Maintaining same ownership to utilise transferred losses

1
Paragraph 707-210(4)(c)

Repeal the paragraph, substitute:

(c): nothing happened, after the time the loss was transferred from the test company to the ^*head company of a ^*consolidated group, to ^*membership interests or voting power:

(i): in an entity that was at that time a ^*subsidiary member of the group; or
(ii): in an entity that was at that time interposed between the test company and the head company;

that would affect whether the test company would meet the conditions in section 165-12 for the income year; and 2
Subparagraph 707-210(4)(d)(ii)

Omit "a subsidiary member of that other group".

Part 2—Utilising losses head company transfers to itself

3
Paragraph 707-335(1)(a)

Omit "from another entity".

4
Paragraph 707-335(3)(e)

Repeal the paragraph, substitute:

(e): the principle that, if the transferee transferred the losses to itself under Subdivision 707-A after the start of the income year, the amount of the losses it can utilise for the income year should be worked out as if:

(i): the losses had been included in the bundle from the start of the income year; and
(ii): the available fraction for the bundle had been 1 from the start of the income year until the time of the transfer; and

Part 3—Effect of exit history rule

5
At the end of Subdivision 707-D

Add:

707-410 Exit history rule does not treat entity as having made a loss

(1): To avoid doubt, if the ^*head company of a ^*consolidated group makes a loss of a particular ^*sort and an entity ceases to be a ^*subsidiary member of the group, the entity is not taken because of section 701-40 (the exit history rule):

(a): to have made the loss; or
(b): to have made another loss of the same sort because of the circumstances that caused the head company to make the loss.

(2): It does not matter whether the ^*head company makes the loss because of a transfer under Subdivision 707-A (whether from the entity or another entity) or because of another provision.