Commonwealth Consolidated Acts

NEW BUSINESS TAX SYSTEM (CONSOLIDATION) ACT (NO. 1) 2002 - SCHEDULE 5

Income Tax Assessment Act 1997

1   After Subdivision   960 - F

Insert:

Subdivision   960 - G -- Membership of entities

Table of sections

960 - 130   Members of entities

960 - 135   Membership interest in an entity

960 - 130   Members of entities

  (1)   The following table sets out who is a member of various entities.

  (2)   If 2 or more entities jointly hold interests or rights that give rise to membership of another entity, each of them is a member of the other entity.

  (3)   An entity is not a member of another entity just because the entity holds one or more interests or rights relating to the other entity that are * debt interests. This subsection has effect despite subsections   ( 1) and (2) of this section.

Example:   An entity is not a member of a company as defined in this section merely because it is a member of the company in the ordinary sense of the term because it holds a finance share in the company, if the finance share is a debt interest. However, if the entity holds other shares in the company that are not debt interests, it will be a member because of those other shares.

960 - 135   Membership interest in an entity

    If you are a * member of an entity:

  (a)   each interest, or set of interests, in the entity; or

  (b)   each right, or set of rights, in relation to the entity;

by virtue of which you are a member of the entity is a membership interest of yours in the entity.

Note:   In conjunction with subsection 960 - 130(3), this means that a debt interest is not a membership interest.

Example:   A member of a company holds a finance share in a company that is a debt interest and some other shares in the company that are not debt interests. Only the other shares are membership interests in the company. The finance share is not, because the member is not a member of the company because of that share (see subsection 960 - 130(3)).

2   Subsection 995 - 1(1)

Insert:

"allocable cost amount" has the meaning given by section   705 - 60 and subsection 711 - 20(1).

3   Subsection 995 - 1(1)

Insert:

"available fraction" for a * bundle of losses has the meaning given by section   707 - 320.

4   Subsection 995 - 1(1)

Insert:

"bundle" of losses has the meaning given by section   707 - 315.

5   Subsection 995 - 1(1)

Insert:

"cessation event" , in relation to a * provisional head company of a * MEC group, has the meaning given by subsection 719 - 60(6).

6   Subsection 995 - 1(1)

Insert:

"consolidatable group" has the meaning given by section   703 - 10.

7   Subsection 995 - 1(1)

Insert:

"consolidated group" has the meaning given by section   703 - 5.

8   Subsection 995 - 1(1)

Insert:

"consolidation transitional year" , for a * member of a * consolidated group, is an income year for that member:

  (a)   during all or any part of which the consolidation of the group has effect; and

  (b)   to which either of the following applies:

  (i)   during that year the Commissioner gives the * head company of the group its * initial head company instalment rate;

  (ii)   that year ends before the Commissioner gives the head company that rate.

9   Subsection 995 - 1(1)

Insert:

"eligible tier-1 company" has the meaning given by section   719 - 15.

10   Subsection 995 - 1(1) (at the end of the definition of film loss )

Add "and affected by section   701 - 30".

11   Subsection 995 - 1(1) (definition of head company )

Repeal the definition, substitute:

"head company" :

  (a)   in relation to a * consolidated group or * consolidatable group--has the meaning given by section   703 - 15; and

  (b)   of a * MEC group--has the meaning given by section   719 - 75.

12   Subsection 995 - 1(1)

Insert:

"initial head company instalment rate" , for an entity that is the * head company of a * consolidated group, means the instalment rate given to the entity by the Commissioner that is worked out on the basis of that entity's first * base assessment as the head company of the consolidated group.

13   Subsection 995 - 1(1)

Insert:

"MEC group" has the meaning given by section   719 - 5.

14   Subsection 995 - 1(1) (definition of member of a company)

Repeal the definition.

15   Subsection 995 - 1(1)

Insert:

"member" of a * consolidated group or * consolidatable group has the meaning given by section   703 - 15.

16   Subsection 995 - 1(1)

Insert:

"member" of an entity has the meaning given by section   960 - 130.

17   Subsection 995 - 1(1)

Insert:

"membership interest" in an entity has the meaning given by section   960 - 135.

18   Subsection 995 - 1(1)

Insert:

"modified market value" of an entity has the meaning given by section   707 - 325.

19   Subsection 995 - 1(1) (at the end of the definition of net capital loss )

Add "and affected by section   701 - 30".

20   Subsection 995 - 1(1)

Insert:

"over-depreciated" has the meaning given by subsection 705 - 50(6).

21   Subsection 995 - 1(1)

Insert:

"over-depreciation" has the meaning given by subsection 705 - 50(6).

22   Subsection 995 - 1(1)

Insert:

"potential MEC group" has the meaning given by section   719 - 10.

23   Subsection 995 - 1(1)

Insert:

"pre-CGT factor" has the meaning given by subsection 705 - 125(2).

24   Subsection 995 - 1(1)

Insert:

"provisional head company" of a * MEC group means the company that holds an appointment in force under section   719 - 60 as the provisional head company of the group.

25   Subsection 995 - 1(1)

Insert:

"retained cost base asset" has the meaning given by subsection 705 - 25(5).

26   Subsection 995 - 1(1) (definition of same business test period )

Omit "and 166 - 40", substitute ", 166 - 40, 707 - 125 and 707 - 135, and affected by section   707 - 400".

27   Subsection 995 - 1(1)

Insert:

"sort" of loss has the meaning given by section   701 - 1.

28   Subsection 995 - 1(1)

Insert:

"special conversion event" , in relation to a * potential MEC group, has the meaning given by section   719 - 40.

29   Subsection 995 - 1(1)

Insert:

"subsidiary member" :

  (a)   of a * consolidated group or a * consolidatable group--has the meaning given by section   703 - 15; and

  (b)   of a * MEC group--has the meaning given by section   719 - 25.

30   Subsection 995 - 1(1)

Insert:

"tax cost is set" has the meaning given by section   701 - 55.

31   Subsection 995 - 1(1)

Insert:

"tax cost setting amount" has the meaning given by section   701 - 60.

32   Subsection 995 - 1(1) (definition of tax loss )

Omit "or 175 - 35", substitute ", 175 - 35 or 701 - 30".

33   Subsection 995 - 1(1)

Insert:

"terminating value" has the meaning given by sections   705 - 30 and 711 - 30.

34   Subsection 995 - 1(1) (definition of test time )

Omit "and 166 - 85", substitute ", 166 - 85, 707 - 125 and 707 - 135".

35   Subsection 995 - 1(1)

Insert:

"tier-1 company" has the meaning given by section   719 - 20.

36   Subsection 995 - 1(1)

Insert:

"top company" has the meaning given by section   719 - 20.

37   Subsection 995 - 1(1)

Insert:

"trial year" has the meaning given by section   707 - 120.

38   Subsection 995 - 1(1)

Insert:

"utilise" a loss has the meaning given by section   707 - 110.

39   Subsection 995 - 1(1)

Insert:

"wholly-owned subsidiary" of an entity has the meaning given by section   703 - 30.

Notes to the New Business Tax System (Consolidation) Act (No. 1) 2002

Note 1

The New Business Tax System (Consolidation) Act (No.   1) 2002 as shown in this compilation comprises Act No.   68, 2002 amended as indicated in the Tables below.

Table of Acts

(a)   Subsection 2(1) (item   2) of the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002 provides as follows:

  (1)   Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table.

(b)   Subsection 2(1) (items   11 and 12) of the New Business Tax System (Consolidation and Other Measures) Act 2003 provides as follows:

  (1)   Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, on the day or at the time specified in column 2 of the table.

( c )   Subsection 2(1) (item   18) of the Tax Laws Amendment (2004 Measures No.   7) Act 2005 provides as follows:

  (1)   Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. Any other statement in column 2 has effect according to its terms.

Table of Amendments