Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 3/19)
Character Range: 5841436–5844201

entity; and
 (d) the original entity had been the interposed company.
Note: This section treats the original entity and the interposed company as having in effect exchanged identities throughout the period before the completion time, but without affecting any of the original entity's other attributes.
 (2) To avoid doubt, subsection (1) also covers everything that, immediately before the completion time, was taken, because of:
 (a) section 701‑1 (Single entity rule); or
 (b) section 701‑5 (Entry history rule); or
 (c) one or more previous applications of this section; or
 (d) section 719‑90 (about the effects of a change of head company of a MEC group); or
 (e) section 719‑125 (about the effects of a group conversion involving a MEC group);
to have happened in relation to the original entity.
 (3) Subsections (1) and (2) have effect:
 (a) for the head company core purposes in relation to an income year ending after the completion time; and
 (b) for the entity core purposes in relation to an income year ending after the completion time; and
 (c) for the purposes of determining the respective balances of the *franking accounts of the original entity and the interposed company at and after the completion 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 Subdivision 717‑E (about transferring to a company leaving a consolidated group various surpluses under the CFC rules in Part X of the Income Tax Assessment Act 1936).

703‑80  Effects on the original entity's tax position
  In applying section 701‑30 to the original entity for the income year that includes the completion time, disregard a non‑membership period that starts before the completion time.
Note 1: Section 701‑30 is about working out an entity's tax position for a period when it is not a subsidiary member of any consolidated group. Its application can also affect the entity's tax position in later income years.
Note 2: Under section 703‑75 the interposed company inherits the original entity's tax position for the part of the income year that ends before the completion time, with the consequence that the original entity's taxable income, income tax payable, and losses of any sort, for that part are each nil.
 Because of section 703‑75 and this section, the only tax payable by the original entity for the income year arises because of the application of section 701‑30 to non‑membership periods in the income year after the completion time.

Division 705—Tax cost setting amount for assets where