Document ID: chunk:federal_register_of_legislation:C2010C00603:clause:1_9:p1
Version: federal_register_of_legislation:C2010C00603
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 1/4)
Character Range: 13677–16428

9  Section 703‑30 (link note)
Repeal the link note, substitute:

Division 705—Tax cost setting amount for assets where entities become members of consolidated groups

Table of Subdivisions

705‑E Expenditure relating to exploration, mining or quarrying

Subdivision 705‑E—Expenditure relating to exploration, mining or quarrying

Table of sections

705‑300 Application and object of this Subdivision
705‑305 Rules affecting depreciating assets
705‑310 Adjustable value of head company's notional assets

705‑300  Application and object of this Subdivision

 (1) If an entity (the joining entity) to which section 40‑75 of this Act applied becomes a subsidiary member of a consolidated group at a time (the joining time), this Subdivision applies in relation to:
 (a) depreciating assets that:
 (i) caused section 40‑75 of this Act to apply to the joining entity; and
 (ii) became assets of the head company of the group at the joining time because of section 701‑1 (Single entity rule) of the Income Tax Assessment Act 1997 operating in relation to the joining entity; and
 (b) notional assets that sections 40‑35, 40‑37, 40‑40 and 40‑43 of this Act treat an entity as holding because of expenditure relating to such depreciating assets;
to affect the operation of Division 40, section 701‑55 and Division 705 of that Act.

 (2) The main object of this Subdivision is to ensure that entities are allowed only an appropriate amount of deductions in connection with such depreciating assets and such expenditure.

705‑305  Rules affecting depreciating assets

 (1) The main object of this section is to ensure that a depreciating asset's tax cost is set, and other matters relevant to working out the deductions of the head company of the consolidated group for the decline in value of the asset are dealt with, so as to:
 (a) ensure that the head company does not get excessive deductions on account of expenditure (by any entity) relating to the asset; and
 (b) reflect the deductions of an entity for a period ending before the joining time for expenditure relating to the asset; and
 (c) ensure that the effective life of the asset for the head company reflects the rate or rates at which the joining entity was able to deduct expenditure relating to the asset (whether or not the expenditure formed part of the cost of the asset).

Prime cost method of working out decline in value of asset

 (2) If the joining entity could not deduct an amount under Subdivision 40‑B of the Income Tax Assessment Act 1997 for the income year that includes the joining time for the decline in value of a depreciating asset, subsection 701‑55(2) of that Act has effect as if the prime cost method for working out the decline in value of the asset applied just