Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p15
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 15/19)
Character Range: 5871090–5873646

company that was the head company of the earlier group just before the end of the earlier group period was not:
 (i) an *associate of the head company of the joined group just before the joining time; or
 (ii) the same company as the head company of the joined group; and
 (c) the earlier group period was at least 24 months.

705‑55  Order of application of sections 705‑40, 705‑45 and 705‑47
  If more than one of sections 705‑40, 705‑45 and 705‑47 apply:
 (a) the *head company may choose the order in which the sections are to apply; and
 (b) if it does not, the order is as follows:
 (i) first, section 705‑40;
 (ii) second, section 705‑45;
 (iii) third, section 705‑47.

705‑56  Modification for tax cost setting in relation to leases

Application of this section
 (1) This section applies if, just before the joining time, the joining entity is the lessor or lessee under a lease of a *depreciating asset (the underlying asset) to which Division 40 applies.

Joining entity is lessor
 (2) If the joining entity is the lessor under the lease and *holds the underlying asset just before the joining time, subsection (5) applies, in relation to the joining entity, to the asset that is the joining entity's right to receive lease payments.
Note: In this situation, the underlying asset will have its tax cost set at the joining time because it would be an asset of the joining entity at that time if the single entity rule did not apply (see section 701‑10).
 (3) If the joining entity is the lessor under the lease and does not *hold the underlying asset just before the joining time:
 (a) subsection (5) applies to the underlying asset in relation to the joining entity; and
 (b) for the purposes of this Division:
 (i) the joining entity's right to receive lease payments is taken to be a *retained cost base asset; and
 (ii) the *tax cost setting amount of that retained cost base asset is taken to be equal to its *market value just before the joining time.
Note: In this situation, the asset that is the joining entity's right to receive lease payments will have its tax cost set at the joining time because it would be an asset of the joining entity at that time if the single entity rule did not apply (see section 701‑10).

Joining entity is lessee
 (4) If the joining entity is the lessee under the lease and does not *hold the underlying asset just before the joining time:
 (a) subsection (5) applies to the underlying asset in relation to the joining entity; and
 (b) the liability that is the lessee's obligation to make lease payments is