Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p81
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 81/95)
Character Range: 5756701–5759541

Rules in Division 701.
 (2) Essentially, a consolidated group consists of an Australian resident head company and all of its Australian resident wholly‑owned subsidiaries (which may be companies, trusts or partnerships). Special rules apply to foreign‑owned groups with no single Australian resident head company.
 (3) An eligible wholly‑owned group becomes a consolidated group after notice of a choice to consolidate is given to the Commissioner.
 (4) This Part also contains rules which set the cost for income tax purposes of assets of entities when they become subsidiary members of a consolidated group and of membership interests in those entities when they cease to be subsidiary members of the group.
 (5) Certain tax attributes (such as losses and franking credits) of entities that become subsidiary members of a consolidated group are transferred under this Part to the head company of the group. These tax attributes remain with the group after an entity ceases to be a subsidiary member.

Objects

700‑10  Objects of this Part
  The objects of this Part are:
 (a) to prevent double taxation of the same economic gain realised by a consolidated group; and
 (b) to prevent a double tax benefit being obtained from an economic loss realised by a consolidated group; and
 (c) to provide a systematic solution to the prevention of such double taxation and double tax benefits that will:
 (i) reduce the cost of complying with this Act; and
 (ii) improve business efficiency by removing complexities and promoting simplicity in the taxation of wholly‑owned groups.

Division 701—Core rules

Table of sections

Common rule
701‑1 Single entity rule

Head company rules
701‑5 Entry history rule
701‑10 Cost to head company of assets of joining entity
701‑15 Cost to head company of membership interests in entity that leaves group
701‑20 Cost to head company of assets consisting of certain liabilities owed by entity that leaves group
701‑25 Tax‑neutral consequence for head company of ceasing to hold assets when entity leaves group

Entity rules
701‑30 Where entity not subsidiary member for whole of income year
701‑35 Tax‑neutral consequence for entity of ceasing to hold assets when it joins group
701‑40 Exit history rule
701‑45 Cost of assets consisting of liabilities owed to entity by members of the group
701‑50 Cost of certain membership interests of which entity becomes holder on leaving group

Supporting provisions
701‑55 Setting the tax cost of an asset
701‑56 Application of subsection 701‑55(6)
701‑58 Effect of setting the tax cost of an asset that the head company does not hold under the single entity rule
701‑60 Tax cost setting amount
701‑60A Tax cost setting amount for asset emerging when entity leaves group
701‑61 Assets in relation to Division 230 financial arrangement—head company's assessable income or