Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 715.55

  (1)   The amount (the comparison amount ) applicable under the table in subsection   705 - 75(2) (about reduction of the step 2 amount) for an accounting liability of the joining entity that is owed to a * member of the joined group at the joining time is reduced if:

  (a)   apart from this section, the comparison amount would be the * reduced cost base (if appropriate, as modified by a later provision of section   705 - 75) of the asset of that member that is constituted by the accounting liability; and

  (b)   the asset is at that time a * 165 - CC tagged asset of that member, and that member owned it at the * changeover time; and

  (c)   that member's * final RUNL just before the joining time (as reduced by any reductions under section   715 - 50) was greater than nil; and

  (d)   that member does not satisfy the * business continuity test for:

  (i)   the period (the business continuity test period ) consisting of the * head company's * trial year; and

  (ii)   the time (the test time ) just before the * changeover time.

Note:   Paragraph   (1)(c) has the effect that if both this section and section   715 - 50 apply to the same member of the joined group, section   715 - 50 is applied before this section.

  (2)   If at the joining time that * member holds:

  (a)   2 or * more assets constituted by accounting liabilities of the joining entity; or

  (b)   at least one asset constituted by an accounting liability of the joining entity, and at least one asset constituted by an accounting liability of another member of the group;

this section applies to each such asset in whichever order that member determines.

Amount of reduction

  (3)   The comparison amount is reduced to the asset's * market value at the joining time.

  (4)   However, if that member's * final RUNL (as reduced by any previous reductions under section   715 - 50 or this section) is less than the difference between:

  (a)   the * reduced cost base referred to in paragraph   (1)(a); and

  (b)   the asset's * market value at the joining time;

the comparison amount is instead reduced by that final RUNL.

  (5)   That * final RUNL is reduced by the amount of the reduction under subsection   (3) or (4).