Document ID: chunk:federal_register_of_legislation:C2025C00029:section:6:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 6 (pt 17/20)
Character Range: 6261874–6264678

company of the group would be entitled to a deduction under section 701‑61 for an income year ending after the leaving time.
 (4) Despite section 701‑40 (the exit history rule), the amount is included in the assessable income of the *head company for the income year, or the head company is entitled to the deduction for the income year.

715‑385  Exit history rule and elective methods applying to Division 230 financial arrangements
 (1) Subsection (2) applies if:
 (a) an entity (the leaving entity) ceases to be a *subsidiary member of a *consolidated group at a time (the leaving time); and
 (b) the *head company of the group has a *Division 230 financial arrangement at the leaving time because the leaving entity is taken by subsection 701‑1(1) (the single entity rule) to be a part of the head company; and
 (c) after the leaving time, the leaving entity makes an election of a kind mentioned in section 230‑220 (fair value method), 230‑265 (foreign exchange retranslation method), 230‑325 (hedging method) or 230‑410 (reliance on financial reports method).
 (2) For the purposes of determining whether the election applies to the financial arrangement, disregard paragraphs 230‑220(1)(d), 230‑265(1)(d), 230‑325(a) and 230‑410(1)(b)).

Subdivision 715‑G—How value shifting rules apply to a consolidated group

Table of sections
715‑410 Extension of single entity rule and entry history rule
715‑450 No reductions or other consequences for interests subject to loss cancellation under Subdivision 715‑H

715‑410  Extension of single entity rule and entry history rule
 (1) Subsection 701‑1(1) (Single entity rule) and section 701‑5 (Entry history rule) also have effect for all the purposes of Part 3‑95 (Value shifting).
Note: One consequence of this for the operation of Division 727 (about indirect value shifting affecting interests in companies and trusts, and arising from non‑arm's length dealings) is that economic benefits provided by or to a subsidiary member of a consolidated group are treated as provided by or to the head company of the group. As a result:
• the head company is the only group member that can be a losing entity or gaining entity for an indirect value shift; and
• economic benefits provided by one group member to another are treated as provided by the head company to itself, and so have no relevance to Division 727.
 Another consequence is that the head company is treated as owning all interests owned by group members in a losing entity or gaining entity that is not a group member.
 (2) This section is not intended to limit the effect that subsection 701‑1(1) and section 701‑5 have apart from this section.

715‑450  No reductions or other consequences for interests subject to loss cancellation under Subdivision 715‑H
  If section 715‑610 reduces a loss