Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:16_5:p4
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 16 cl 5 (pt 4/6)
Character Range: 267670–270677

by subparagraph (d)(iii), the transitional foreign‑held indirect subsidiary would need to have satisfied the set of requirements in either section 701C‑10 or 701C‑15

Subdivision 701C‑C—Modifications of tax cost setting rules

Table of sections

Application and object

701C‑25 Application and object of this Subdivision

Basic modification

701C‑30 Transitional foreign‑held subsidiary to be treated as part of head company

Other modifications

701C‑35 Trading stock value not set for assets of transitional foreign‑held subsidiaries
701C‑40 Cost setting rules for exit cases—modification of core rules
701C‑50 Cost setting rules for exit cases—reference to modification of core rule

Application and object

701C‑25  Application and object of this Subdivision

Application

 (1) This Subdivision applies if an entity (the transitional foreign‑held joining entity) that is a transitional foreign‑held subsidiary or a transitional foreign‑held indirect subsidiary becomes a subsidiary member of a consolidated group at the time (the formation time) the group comes into existence.

Object

 (2) The object of this Subdivision is to ensure that, on becoming a subsidiary member at the formation time, the tax cost of the assets of any transitional foreign‑held subsidiary is not set and that the tax cost setting amount for assets of any transitional foreign‑held indirect subsidiary that becomes a subsidiary member at that time takes account of this.

Basic modification

701C‑30  Transitional foreign‑held subsidiary to be treated as part of head company

  The following provisions:
 (a) section 701‑10 of the Income Tax Assessment Act 1997 (about setting the tax cost of assets that an entity brings into the group);
 (b) Subdivision 705‑A of that Act, in its application in accordance with Subdivision 705‑B of that Act;
apply, for the purposes of setting the tax cost of an asset of the transitional foreign‑held entity at the formation time, as if each subsidiary member of the group that is a transitional foreign‑held subsidiary at the formation time were a part of the head company of the group, rather than a separate entity.

Note 1: This section means that references in those provisions to matters internal to the group operate as if transitional foreign‑held subsidiaries in the group were parts of the head company of the group. For example:

(a) provisions operating if the head company holds (whether directly or indirectly) membership interests in another entity operate even if a transitional foreign‑held subsidiary actually holds those interests; and

(b) provisions operating if the head company owns or controls another entity operate even if one or more transitional foreign‑held subsidiaries actually own or control that other entity; and

(c) provisions operating if an entity is interposed between the head company and another entity operate even if the first entity is actually interposed between a transitional foreign‑held subsidiary and the other entity.

Note 2: If