Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:4_4:p5
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 4 cl 4 (pt 5/10)
Character Range: 71302–74117

joining acquired groups no longer relevant

 (2) Section 705‑125 (which provides for a pre‑CGT factor to be worked out for assets of the acquired group) has effect as if a note were added at the end of the section stating that *pre‑CGT factors worked out for assets of entities when they became *subsidiary members of the acquired group cease to have any relevance when the acquired group ceases to exist in circumstances in which this Subdivision applies.

Subdivision 705‑D—Where multiple entities are linked by membership interests

Guide to Subdivision 705‑D

705‑210  What this Subdivision is about

      When entities that are linked by membership interests join a consolidated group, the tax cost setting amount for the assets of each entity that becomes a subsidiary member is worked out by modifying the rules in Subdivision 705‑A, so that the amount reflects the cost to the group of acquiring the entities.

Table of sections

Application and object

705‑215 Application and object of this Subdivision

Modified application of Subdivision 705‑A

705‑220 Subdivision 705‑A has effect with modifications
705‑225 Order in which tax cost setting amounts are to be worked out where linked entities have membership interests in other linked entities
705‑230 Adjustment in working out step 4 of allocable cost amount for successive distributions through interposed linked entities
705‑235 Adjustment to allocation of allocable cost amount to take account of owned losses of certain linked entities
705‑240 Modified application of section 705‑57
705‑245 Working out pre‑CGT factors where subsidiary members have membership interests in other subsidiary members

[This is the end of the Guide.]

Application and object

705‑215  Application and object of this Subdivision

Application

 (1) This Subdivision has effect for the head company core purposes set out in subsection 701‑1(2) if:
 (a) 2 or more entities (each of which is a linked entity) become members of a *consolidated group at the same time as a result of an event that happens in relation to one of them; and
 (b) the case is not covered by Subdivision 705‑C.

Note: This is the third exception to Subdivision 705‑A: see paragraph 705‑15(c). In order for this Subdivision to have effect, one of the entities would need to hold directly or indirectly, just before the joining time, membership interests in all of the other entities.

Example: Entities A and B are not members of a consolidated group, but members of such a group, together with entity A, jointly hold all the membership interests in entity B. Members of the group then acquire all the membership interests in entity A and as a result of this event both entities, which are linked by the membership interests that one holds in the other, become members of the group.

Object