Document ID: chunk:federal_register_of_legislation:C2010C00603:clause:1_9:p3
Version: federal_register_of_legislation:C2010C00603
Segment Type: clause
Provision Reference: sch 1 cl 9 (pt 3/4)
Character Range: 18605–21264

were such period as is reasonable, having regard to the following:
 (a) the remainder of the effective life of the asset, worked out just before the joining time;
 (b) the remainder of the effective life, worked out just before the joining time, of each notional asset (which section 40‑35, 40‑37, 40‑40 or 40‑43 of this Act treats an entity as holding wholly or partly because of expenditure relating to the depreciating asset);
 (c) any other relevant matters.
Subsection 701‑55(2) of that Act has effect subject to this subsection.

Note 1: The effective life of the depreciating asset was set on 1 July 2001 by subsection 40‑75(4) of this Act, but may have been reset since under Subdivision 40‑B of the Income Tax Assessment Act 1997.

Note 2: The effective life of a notional asset is specified by whichever one of sections 40‑35, 40‑37, 40‑40 and 40‑43 of this Act is relevant to the notional asset.

Choosing to reduce tax cost setting amount of asset

 (8) If:
 (a) a depreciating asset's tax cost setting amount would be greater than the joining entity's terminating value for the asset; and
 (b) the head company of the consolidated group chooses to apply this subsection to the asset;
the asset's tax cost setting amount is reduced so that it equals the terminating value.

Note 1: A consequence of the choice is that subsection (7) applies to the asset.

Note 2: The amount of the reduction is not re‑allocated among other assets.

 (9) Section 705‑55 of the Income Tax Assessment Act 1997 has effect as if subsection (8) of this section were included in section 705‑45 of that Act.

Note: This affects the order of reductions in the asset's tax cost setting amount under subsection (8) of this section and sections 705‑40 and 705‑50 of the Income Tax Assessment Act 1997.

705‑310  Adjustable value of head company's notional assets

Application

 (1) If:
 (a) section 40‑35, 40‑37, 40‑40 or 40‑43 of this Act treats the head company of the consolidated group as holding a notional asset at the joining time because expenditure is taken under section 701‑5 (Entry history rule) of the Income Tax Assessment Act 1997 to be expenditure of the head company; and
 (b) section 40‑35, 40‑37, 40‑40 or 40‑43 of this Act treated the joining entity as holding a notional asset just before the joining time because of the expenditure;
this section affects the adjustable value of the head company's notional asset.

Object

 (2) The object of this section is to ensure, by reducing the adjustable value of a notional asset of the head company, that the head company cannot get both:
 (a) a deduction for the notional asset reflecting the amount of the