Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_4:p1
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 1/8)
Character Range: 29277–32064

4                        section 701‑50 (Cost of certain membership interests of which entity becomes holder on leaving group)                                                                                                                   the amount worked out in accordance with section 711‑55

701‑65  Net income and losses for trusts and partnerships

Net income of partnerships and trusts

 (1) If:
 (a) another provision of this Division applies for the purpose of:
 (i) working out the amount of the entity's liability (if any) for income tax calculated by reference to an income year; or
 (ii) working out the amount of the entity's taxable income for an income year; and
 (b) the entity is a trust or partnership;
the provision instead applies in a corresponding way for the purpose of working out the amount of the entity's net income, as defined in the Income Tax Assessment Act 1936, (if any) for the income year.

Note: Subsection 701‑30(3) requires non‑membership periods mentioned in that subsection to be treated as the start and end of an income year. This section would therefore also apply to those periods.

Partnership losses

 (2) If:
 (a) another provision of this Division applies for the purpose of working out the amount of the entity's loss (if any) of a particular *sort for an income year; and
 (b) the entity is a partnership;
the provision instead applies in a corresponding way for the purpose of working out the amount of an entity's partnership loss, as defined in section 90 of the Income Tax Assessment Act 1936, (if any) for the income year.

Note: The provision applies normally to a trust, as it can have a loss of any sort worked out in the same way as a loss of the same sort for an entity of another kind.

Exceptions

701‑70  Adjustments to taxable income where identities of parties to arrangement merge on joining group

Section applies to certain arrangements

 (1) This section applies for the head company core purposes and the entity core purposes if, just before the time (the joining time) when the entity becomes a *subsidiary member of the group, an *arrangement is in force under which:
 (a) expenditure is to be, or has been, incurred in return for the doing of some thing; and
 (b) the persons incurring the expenditure and deriving the corresponding amount (each of which is a combining entity) are the entity and either:
 (i) another entity that became a subsidiary member at the same time; or
 (ii) the *head company.

Note 1: If expenditure incurred under an arrangement consists of a payment of loan interest or a payment of a similar kind, the expenditure would be incurred in return for the making available or continued making available of the loan principal, or other amount of a similar kind, under the arrangement.