Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 11/19)
Character Range: 6308058–6310574

in subsection (1) of this section; or
• because of section 701‑1 (Single entity rule); or
• because of section 701‑5 (Entry history rule).
 (4) The proportion is worked out by multiplying that part of the original amount by:
• the number of days that are in both the income year and the *spreading period, and on which the entity was a *subsidiary member of the group;
divided by:
• the number of days that are in both the income year and the spreading period.

Entity's deduction for a non‑membership period
 (5) If:
 (a) for some but not all of an income year, an entity is a *subsidiary member of a *consolidated group; and
 (b) the entity could have deducted for that income year a part of the original amount if throughout that income year the entity had not been a subsidiary member of any *consolidated group;
the entity can deduct a proportion of that part for a part of the income year that is a non‑membership period for the purposes of section 701‑30.
Note 1: Section 701‑30 is about working out an entity's tax position for a period when it is not a subsidiary member of any consolidated group.
Note 2: If throughout the income year the entity is not a subsidiary member of any consolidated group or MEC group, this section does not affect the part of the original amount that the entity can deduct for the income year either:
• because the entity is the entity referred to in subsection (1); or
• because of section 701‑40 (Exit history rule).
 (6) The proportion is worked out by multiplying that part of the original amount by:
• the number of days that are in both the non‑membership period and the *spreading period;
divided by:
• the number of days that are in both the income year and the spreading period.

Spreading period
 (7) The spreading period for the original amount is the period by reference to which the respective parts of the original amount that, apart from this Part, an entity could deduct for the 2 or more income years are worked out.
Note: For example, under section 82KZMD of the Income Tax Assessment Act 1936 an item of expenditure on something is spread over the period over which that thing is to be provided, which is called the eligible service period. Deductions for the item for a sequence of income years are worked out by reference to how much of that period falls within each of those income years.

716‑70  Capital expenditure that is fully deductible in one income year
 (1) This section applies if, apart from this Part, an entity could deduct for a single income