Document ID: chunk:federal_register_of_legislation:C2013C00453:clause:1_104b:p1
Version: federal_register_of_legislation:C2013C00453
Segment Type: clause
Provision Reference: sch 1 cl 104B (pt 1/2)
Character Range: 287721–290301

104B  Asset or liability of entity joining pre‑TOFA consolidated group etc.
(1) This item applies in relation to an asset or liability if:
 (a) an entity (the joining entity) becomes a subsidiary member of a consolidated group or MEC group at a time (the joining time); and
 (b) the asset or liability becomes that of the head company of the group because subsection 701‑1(1) of the Income Tax Assessment Act 1997 (the single entity rule) applies when the joining entity becomes a subsidiary member of the group; and
 (c) the asset or liability is, or is part of, a financial arrangement at the start of the head company's first applicable income year; and
 (d) the head company's first applicable income year starts after the joining time; and
 (e) the head company has the asset or liability (whether or not because of subsection 701‑1(1) of the Income Tax Assessment Act 1997 (the single entity rule)) throughout the period:
 (i) starting at the joining time; and
 (ii) ending at the start of the head company's first applicable income year; and
 (f) the head company elects to have subitem 104(2) apply to itself; and
 (g) the joining entity is not a chosen transitional entity (within the meaning of Division 701 of the Income Tax (Transitional Provisions) Act 1997).
Note: Item 104C prevents the application of this item in relation to certain assets and liabilities.
(2) For the purposes of subitem 104(13) and Division 230 of the Income Tax Assessment Act 1997:
 (a) in the case of an asset—assume that subsection 701‑55(5A) of that Act applies in relation to the asset at the joining time; and
 (b) in the case of a liability—assume that section 715‑375 of that Act applies as if the liability is, or is part of, a Division 230 financial arrangement at the joining time.
(3) Subitems 104(14) and (15) do not apply in relation to the asset or liability.
(4) In the case of an asset, subitems (5), (6) and (7) apply if, on the assumption that subsection 701‑55(5A) of the Income Tax Assessment Act 1997 applies in relation to the asset at the joining time, paragraph 701‑55(5A)(b) of that Act would apply in relation to the asset.
(5) Work out if the Division 230 starting value for the asset at the joining time exceeds or falls short of its tax cost setting amount.
(6) If there is an excess, an amount equal to 25% of that excess is included in the head company's assessable income for:
 (a) the head company's first applicable income year; and
 (b) each of the 3 subsequent income years.
(7) If there is a shortfall, the head company is entitled to a deduction equal to