Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p17
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 17/17)
Character Range: 605182–607350

a part of the head company.
 (2) If this section applies, the head company may, in relation to the entity's ceasing to be a subsidiary member, choose that the terminating value for the asset, that is to be used in applying step 1 of the table in section 711‑20 of the Income Tax Assessment Act 1997, is equal to its market value just before the transitional group came into existence.

701‑50  Increased allocable cost amount for leaving entity if it takes privatised asset brought into group by chosen transitional entity

Application
 (1) This section provides for an addition to the step 1 amount for working out under section 711‑20 of the Income Tax Assessment Act 1997 the allocable cost amount for an entity (the leaving entity) that ceases to be a subsidiary member of the transitional group at a time (the leaving time), if:
 (a) the head company of the group holds an asset at the leaving time because the leaving entity is taken by subsection 701‑1(1) of that Act to be a part of the head company; and
 (b) the head company started to hold the asset because of that subsection when a chosen transitional entity became a subsidiary member of the group.

If entity sale situation affected asset's cost for chosen transitional entity
 (2) If:
 (a) at a time before the chosen transitional entity became a subsidiary member of the transitional group:
 (i) all of that entity's ordinary income and statutory income was not assessable income; and
 (ii) that entity held the asset; and
 (b) just after that time, some or all of that entity's ordinary income and statutory income became assessable income because another entity that later became a member of the transitional group purchased all the membership interests in the entity; and
 (c) the amount of the purchase price reasonably attributable to the asset exceeded the amount worked out under subsection (3);
the excess is added to the step 1 amount.
 (3) Work out the amount for the purposes of paragraph (2)(c) using the following table:

Amount for paragraph (2)(c)
                             If, because of the circumstances described in paragraphs (2)(a) and (b):                       The amount is: