Document ID: chunk:federal_register_of_legislation:C2010C00583:clause:4_1:p1
Version: federal_register_of_legislation:C2010C00583
Segment Type: clause
Provision Reference: sch 4 cl 1 (pt 1/6)
Character Range: 19630–22618

1  After Subdivision 713‑A
Insert:

Subdivision 713‑E—Partnerships

Guide to Subdivision 713‑E

713‑200  What this Subdivision is about

      This Subdivision modifies tax cost setting rules in Divisions 701 and 705 so that they take account of the special characteristics of partnerships. The modifications apply in these situations:

                (a) an entity that is a partner in a partnership becomes a subsidiary member of a consolidated group;
                (b) a partnership becomes a subsidiary member of a consolidated group.

Table of sections

Objects

713‑205 Objects of this Subdivision

Partnership cost setting interests etc.

713‑210 Partnership cost setting interests
713‑215 Terminating value for partnership cost setting interest

Setting tax cost of partnership cost setting interests

713‑220 Set tax cost of partnership cost setting interests if partner joins consolidated group
713‑225 Tax cost setting amount for partnership cost setting interest
713‑230 Reduction in allocable cost amount if partnership asset is over‑depreciated

Special rules where partnership joins consolidated group

713‑235 Partnership joins group—set tax cost of partnership assets
713‑240 Partnership joins group—tax cost setting amount for partnership asset
713‑245 Partnership joins group—pre‑CGT factor for partnership asset

[This is the end of the Guide.]

Objects

713‑205  Objects of this Subdivision

 (1) The first object of this Subdivision is to ensure that if:
 (a) an entity that is a partner in a partnership becomes a *subsidiary member of a *consolidated group; and
 (b) the partnership does not become a *subsidiary member of the group;
the provisions mentioned in subsection (3) operate as if the *partnership cost setting interests of the entity in the partnership were the entity's only assets relating to the partnership.

Note: In general, the head company of the consolidated group is treated as a partner in the partnership, in accordance with section 701‑1 (the single entity rule).

 (2) The second object of this Subdivision is to ensure that where a partnership becomes a *subsidiary member of a *consolidated group, the provisions mentioned in subsection (3) operate:
 (a) as if the group became the holder of the assets of the partnership; and
 (b) to set the *tax cost of the assets of the partnership at an appropriate amount, taking into account the taxation treatment of partnerships.

Note: While the partnership is a subsidiary member of the group, it loses its separate tax identity (under the single entity rule in subsection 701‑1(1)). Therefore, in general, the assets of the partnership are treated as assets of the head company of the group and partnership cost setting interests in the partnership are ignored.

 (3) The provisions are:
 (a) section 701‑10 (about setting the tax cost of assets that an entity brings into the group); and
 (b) Subdivision 705‑A; and
 (c) any other provision of this Act giving Subdivision 705‑A a