Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 711.75

  (1)   This section applies if the leaving entity ceases to be a * subsidiary member of the old group because of a situation giving rise to * CGT event A1, C2, E1, E2 or E8 in relation to one or more * membership interests in the leaving entity.

  (2)   For the purposes of applying subsections   104 - 230(2) and (8) in relation to those * membership interests:

  (a)   disregard subsection   701 - 1(1) (the single entity rule) in working out the * net value of the leaving entity; and

  (b)   treat the reference in subsection   104 - 230(2) to "Just before the other event happened" as a reference to "Just before the leaving time".

Note 1:   The single entity rule will continue to apply in determining whether the property mentioned in subsection   104 - 230(2) for the leaving entity was acquired on or after 20   September 1985.

Note 2:   However, in a case of multiple exit from a consolidated group (see section   711 - 55), the property mentioned in subsection   104 - 230(2) for the leaving entity may include membership interests in another entity leaving the group at the leaving time. To determine which of those membership interests were acquired on or after 20   September 1985 for the purposes of applying subsection   104 - 230(2) to the leaving entity, see section   711 - 65.

  (3)   In determining the sum of the * cost bases of the property mentioned in subsection   104 - 230(6), treat the cost base of an asset that is included in that property as:

  (a)   if the asset has its * tax cost set at the leaving time under section   701 - 50--its * tax cost setting amount; or

  (b)   if the * terminating value of the asset is taken into account in working out the step 1 amount under section   711 - 25 for the leaving entity--that terminating value; or

  (c)   if the asset is taken into account in working out the step 3 amount under section   711 - 40 for the leaving entity--the value of the asset that is so taken into account.

Table of Subdivisions

713 - A   Trusts

713 - C   Some unit trusts treated like head companies of consolidated groups

713 - E   Partnerships

713 - L   Life insurance companies

713 - M   General insurance companies

Table of sections

Working out a joined group's allocable cost amount for a joining trust

713 - 20   Increasing the step 1 amount for settled capital that could be distributed tax free in respect of discretionary interests

713 - 25   Undistributed, realised profits that accrue to joined group before joining time and could be distributed tax free--step 3 in working out allocable cost amount

Determining destination of distribution by non - fixed trust

713 - 50   Factors to consider