Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:3_2:p1
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 3 cl 2 (pt 1/6)
Character Range: 20798–23723

2  After Subdivision 705‑A
Insert:

Subdivision 705‑B—Case of group formation

Guide to Subdivision 705‑B

705‑130  What this Subdivision is about
      When a consolidated group comes into existence, the tax cost setting amount for the assets of each entity that becomes a subsidiary member is worked out by modifying the rules in Subdivision 705‑A, so that the amount reflects the cost to the group of acquiring the entity.

Table of sections

Application and object
705‑135 Application and object of this Subdivision

Modified application of Subdivision 705‑A
705‑140 Subdivision 705‑A has effect with modifications
705‑145 Order in which tax cost setting amounts are to be worked out where subsidiary members have membership interests in other subsidiary members
705‑150 Adjustment to result of step 3 in working out allocable cost amount where pre‑formation time roll‑over from head company to member of wholly‑owned group
705‑155 Adjustment in working out step 4 of allocable cost amount for successive distributions through interposed entities
705‑160 Adjustment to allocation of allocable cost amount to take account of owned losses of certain entities that become subsidiary members
705‑165 Working out pre‑CGT factors where subsidiary members have membership interests in other subsidiary members
[This is the end of the Guide.]

Application and object

705‑135  Application and object of this Subdivision

Application
 (1) This Subdivision has effect for the head company core purposes set out in subsection 701‑1(2) if one or more entities become *subsidiary members of a *consolidated group at the time (the formation time) it comes into existence as a consolidated group.
Note: This is the first exception to Subdivision 705‑A: see paragraph 705‑15(a).

Object
 (2) The object of this Subdivision is to modify the rules in Subdivision 705‑A (which basically determine the tax cost setting amount for assets of an entity joining an existing *consolidated group) so that they have effect, and take account of different circumstances that apply, when a consolidated group comes into existence.
Note: The main circumstance is where one of the entities has membership interests in another. In such a case, the order in which the rules in Subdivision 705‑A are applied will affect the tax cost setting amounts for the assets of the entities.

Modified application of Subdivision 705‑A

705‑140  Subdivision 705‑A has effect with modifications
 (1) Subdivision 705‑A has effect in relation to each entity becoming a *subsidiary member of the *consolidated group at the formation time in the same way as that Subdivision has effect in relation to an entity becoming a subsidiary member of a consolidated group in circumstances covered by that Subdivision.
 (2) However, that effect of Subdivision 705‑A is subject to modifications set out in this Subdivision.

705‑145  Order in which tax cost setting amounts are to be