Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:9_2:p2
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 9 cl 2 (pt 2/5)
Character Range: 130916–133655

of that Act applies, of the income year that is taken by subsection (3) of that section to end, is the value determined in accordance with sections 70‑45 to 70‑70 of that Act.

For head company, trading stock to be retained cost base asset with tax cost setting amount equal to entity's year‑end valuation

 (3) For the head company core purposes when the continuing majority‑owned entity becomes a subsidiary member of the designated group, the asset is a retained cost base asset whose tax cost setting amount is equal to the value applicable in accordance with paragraph (2)(b).

701A‑10  Modified application of Part 3‑90 of Income Tax Assessment Act 1997 to certain internally generated assets of continuing majority‑owned entity

 (1) This section applies if:
 (a) because subsection 701‑1(1) (the single entity rule) of the Income Tax Assessment Act 1997 applies, a depreciating asset becomes that of the head company of a continuing majority‑owned entity's designated group when the entity becomes a subsidiary member of that group; and
 (b) the continuing majority‑owned entity's terminating value for the asset is less than the asset's tax cost setting amount; and
 (c) the asset existed at the start of 27 June 2002; and
 (d) more than half of the expenditure incurred in constructing or creating the asset was of a revenue nature and allowable as a deduction to the entity (whether or not the continuing majority‑owned entity) that constructed or created the asset; and
 (e) for every balancing adjustment event occurring for the asset before the continuing majority‑owned entity became a subsidiary member of the group, there was roll‑over relief under section 40‑340 of the Income Tax Assessment Act 1997.

Reduced depreciation deductions etc. for head company

 (2) If this section applies, for the head company core purposes:
 (a) while the asset is, because subsection 701‑1(1) of that Act applies, that of the head company of the designated group, for the purpose of working out deductions for the asset's decline in value under Division 40 of the Income Tax Assessment Act 1997, its tax cost setting amount is taken to be equal to the continuing majority‑owned entity's terminating value for the asset; and
 (b) if a balancing adjustment event occurs for the asset, or the head company ceases to hold the asset because an entity ceases to be a subsidiary member of the group, and:
 (i) the deductions for its decline in value up to that time worked out on the basis in paragraph (a);
  are less than:
 (ii) the deductions that would have been worked out using its actual tax cost setting amount;
  then:
 (iii) if a balancing adjustment event occurs for the asset—the shortfall is allowable as a deduction to the head