Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p12
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 12/31)
Character Range: 637382–640287

value of trading stock at tax‑neutral amount) does not apply to the assets of the transitional foreign‑held joining entity if it is a transitional foreign‑held subsidiary.

701C‑40  Cost setting rules for exit cases—modification of core rules
  Section 701‑15 of the Income Tax Assessment Act 1997 applies as if the following subsection were added at the end of the section:

Application to transitional foreign‑held subsidiaries
 (4) If an entity that ceases to be a subsidiary member is a transitional foreign‑held subsidiary when it does so:
 (a) this section applies to each membership interest in the transitional foreign‑held subsidiary that is held by an entity (an eligible non‑resident) of a kind mentioned in subparagraph 701C‑20(b)(i), (ii), (iii) or (iv) of the Income Tax (Transitional Provisions) Act 1997 in the same way as it applies to a membership interest in the transitional foreign‑held subsidiary that is held by the head company; and
 (b) for that purpose, the definition of head company core purposes in subsection 701‑1(2) of the Income Tax Assessment Act 1997 applies to the eligible non‑resident in the same way as it applies to the head company.

701C‑50  Cost setting rules for exit cases—reference to modification of core rule
  Section 711‑5 of the Income Tax Assessment Act 1997 applies as if the following note were added at the end of the section:
Note: If the leaving entity is a transitional foreign‑held subsidiary (within the meaning of section 701C‑20 of the Income Tax (Transitional Provisions) Act 1997), this Division will, in accordance with subsection 701‑15(4) of this Act (see section 701C‑40 of the first‑mentioned Act), apply to membership interests that an eligible non‑resident mentioned in that subsection holds in the entity in the same way as it applies to membership interests that the head company holds in the entity.

Division 701D—Transitional foreign loss makers

Table of Subdivisions
701D‑A Object of this Division
701D‑B Membership rules allowing transitional foreign loss makers to remain outside consolidated group

Subdivision 701D‑A—Object of this Division

Table of sections
701D‑1 Object of this Division

701D‑1  Object of this Division
 (1) The object of this Division is to allow an entity that is a potential subsidiary member of a consolidated group to utilise an overall foreign loss (as defined in former section 160AFD of the Income Tax Assessment Act 1936) during a transitional period, rather than have the head company utilise the loss subject to the restrictions in Subdivision 707‑C of the Income Tax Assessment Act 1997.
 (2) Therefore, this Division allows the head company to prevent the entity from being a subsidiary member of the group, for a transitional period.

Subdivision 701D‑B—Rules allowing transitional foreign loss makers to remain outside consolidated group

Table of sections
701D‑10 Transitional foreign