Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 709.185

  (1)   This section operates if:

  (a)   an entity (the joining entity ) becomes a * subsidiary member of a * consolidated group at a time (the joining time ); and

  (b)   the joining entity is entitled to a * tax offset under section   205 - 70 for the income year that ends or, if subsection   701 - 30(3) applies, that is taken by subsection   (3) of that section to end, at the joining time; and

  (c)   an amount (the joining entity's excess ) of the offset remains after applying section   63 - 10 (about the tax offset priority rules) to the joining entity's basic income tax liability for that income year.

Transfer of excess to head company

  (2)   For the purpose of applying subsection   205 - 70(1) to the * head company of the * consolidated group for the income year in which the joining time occurs:

  (a)   if, as described in paragraph   205 - 70(1)(c), an amount of a * tax offset remains after applying section   63 - 10--that amount is taken to be increased by the amount of the joining entity's excess; or

  (b)   otherwise:

  (i)   paragraph   205 - 70(1)(c) is taken to apply to the head company; and

  (ii)   the remaining amount of a tax offset covered by that paragraph is taken to be the amount of the joining entity's excess.

Note:   Paragraph   205 - 70(1)(c) refers to tax offsets under section   205 - 70.

  (2A)   In working out whether paragraph   (2)(a) applies, take into account any application of this section to any other entity that became a * subsidiary member of the group before the joining time.

Joining entity prevented from utilising excess in later income years

  (3)   For the purpose of applying subsection   205 - 70(1) to the joining entity for any income year after that in which the joining time occurs, the joining entity's excess is disregarded.