Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:8_8:p1
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 8 cl 8 (pt 1/10)
Character Range: 103505–106111

8  After section 719‑80
Insert:

Effects of change of head company

719‑85  Application

  Sections 719‑90 to 719‑95 set out the effects if:
 (a) a company (the old head company) is the *head company of a *MEC group at the end of an income year; and
 (b) a different company (the new head company) is the head company of the group at the start of the next income year (the transition time).

Note: This case can arise from the operation of section 719‑75, which treats an entity that is the provisional head company of the group at a certain time in the income year as being the group's head company at all times in the income year when the group is in existence.

 The old head company is also taken to become a subsidiary member of the group at the transition time, and the new head company is taken to cease being a subsidiary member at that time. Section 719‑95 ensures that these results do not change the tax position of the group.

719‑90  New head company treated as substituted for old head company at all times before the transition time

 (1) Everything that happened in relation to the old head company before the transition time is taken to have happened in relation to the new head company instead, just as if the new head company had been the old head company at all times before the transition time.

Note: This section treats the new head company as having in effect assumed the identity of the old head company throughout the period before the transition time, but without affecting any of the other attributes of the old head company.

 (2) To avoid doubt, subsection (1) also covers everything that, immediately before the transition time, was taken, because of:
 (a) section 701‑1 (Single entity rule); or
 (b) section 701‑5 (Entry history rule); or
 (c) section 703‑75 (about the effects of choice to continue consolidated group after shelf company becomes new head company); or
 (d) one or more previous applications of this section;
to have happened in relation to the old head company.

 (3) Subsections (1) and (2) have effect:
 (a) for the head company core purposes in relation to an income year ending after the transition time; and
 (b) for the entity core purposes in relation to an income year ending after the transition time.

 (4) Subsections (1) and (2) have effect subject to:
 (a) section 701‑40 (Exit history rule); and
 (b) a provision of this Act to which section 701‑40 is subject because of section 701‑85 (about exceptions to the core rules in Division 701).

Note: An example of provisions covered by paragraph (b) of this subsection is section 707‑410, which