Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies if an entity ceases to be a subsidiary member of the transitional group and the requirements of subsections (2) to (4) are satisfied.
Asset held at leaving time
(2) Just before the entity ceases to be a subsidiary member, it must, disregarding subsection 701 - 1(1) (the single entity rule) of the Income Tax Assessment Act 1997 , hold an asset.
Reduction of asset's tax cost setting amount for over - depreciation
(3) When the transitional group came into existence:
(a) the asset must have become that of the head company of the transitional group because subsection 701 - 1(1) of that Act applied in relation to a transitional entity; and
(b) former section 705 - 50 of that Act must have reduced by an amount (the reduction amount ) the tax cost setting amount for the asset.
Asset held continuously within group
(4) The asset must, disregarding subsection 701 - 1(1) of that Act, have been held at all times by the head company or a subsidiary member of the transitional group from when the transitional group came into existence until the entity ceases to be a subsidiary member of the transitional group.
Head company's choice
(6) If this section applies, the head company may, in relation to the entity's ceasing to be a subsidiary member, choose that the terminating value for the asset, that is to be used in applying step 1 of the table in section 711 - 20 of the Income Tax Assessment Act 1997 , is increased by so much of the reduction amount as the head company chooses.