Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_6:p4
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 6 (pt 4/14)
Character Range: 141060–143803

of a *CGT asset at an earlier time if:
 (c) at the time (the joining time) when an entity became a *subsidiary member of the group, the asset became an asset of the head company because of subsection 701‑1(1) (Single entity rule); and
 (d) the earlier time is an *alteration time that happened in respect of the entity before the joining time;
unless the entity is a chosen transitional entity under Division 701 of the Income Tax (Transitional Provisions) Act 1997.

Note: If the joining entity is a chosen transitional entity, section 701‑15 of the Income Tax (Transitional Provisions) Act 1997 prevents:
  *   section 701‑10 (cost to head company of assets that entity brings into group); and
  *   subsection 701‑35(4) (setting value of trading stock at tax‑neutral amount);

 of this Act from applying to the assets of the joining entity in relation to the joining time.

 If the joining entity is not a chosen transitional entity, it is assumed that the process of resetting the tax costs of its assets will bring their tax costs into closer alignment to their market values, and so remove the need to consider unrealised losses on those assets that existed before the joining time.

 (2) This section has effect despite section 701‑5 (Entry history rule).

715‑230  No reductions or other consequences for interests subject to loss cancellation under Subdivision 715‑H

  If section 715‑610 reduces a loss that would otherwise be *realised for income tax purposes by a *realisation event that happens to an interest in, or a debt owed by, a company, sections 165‑115ZA and 165‑115ZB do not apply (and are taken never to have applied) to the interest or debt, in relation to an *alteration time that happened for the company during the ownership period referred to in subsection 715‑610(2).

Note 1: Section 715‑610 is about cancelling a loss on a realisation event for a direct or indirect interest in a subsidiary member of a consolidated group.

Note 2: Sections 165‑115ZA and 165‑115ZB are about the consequences that an alteration time for a loss company has for relevant equity interests and relevant debt interests in the company.

[The next section is section 715‑240.]

How Subdivision 165‑CD applies to leaving entity that is a company

715‑240  Application of sections 715‑245 to 715‑260

  Sections 715‑245 to 715‑260 affect how Subdivision 165‑CD (about reductions after alterations in ownership or control of loss company) applies to a company (the leaving entity) at and after the time (the leaving time) when it ceases to be a *subsidiary member of a *consolidated group that came into existence at a particular time (the formation time).

Note: If a trust ceases to be a subsidiary member of a consolidated group: see