Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p10
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 10/31)
Character Range: 632062–635015

the set of requirements in section 701C‑10 are met.

Test entity must be a subsidiary member on assumption that head company beneficially owned all membership interests beneficially owned by subsection (3) companies
 (4) At the test time, it must be the case that the test entity would be a subsidiary member of the group if the head company beneficially owned all the membership interests beneficially owned by each company described in subsection (3).

701C‑20  Transitional foreign‑held subsidiaries and transitional foreign‑held indirect subsidiaries
  If:
 (a) an entity is a subsidiary member of a consolidated group in a case where the set of requirements described in section 701C‑10 are met; and
 (b) one or more of the membership interests in the entity are held by:
 (i) a non‑resident company; or
 (ii) a non‑resident trust; or
 (iii) an entity that holds the membership interests only as a nominee of one or more entities each of which is a non‑resident company or a non‑resident trust; or
 (iv) a partnership, each of the partners in which is a non‑resident company or a non‑resident trust;
then:
 (c) the entity is a transitional foreign‑held subsidiary of the group; and
 (d) if:
 (i) the transitional foreign‑held subsidiary; or
 (ii) an entity that is a transitional foreign‑held indirect subsidiary of the group because of another application of this paragraph;
  holds one or more membership interests in another entity that:
 (iii) is a subsidiary member of the group; and
 (iv) is not a transitional foreign‑held subsidiary of the group;
  that other member is a transitional foreign‑held indirect subsidiary of the group.
Note: In order to be a subsidiary member of the group as required by subparagraph (d)(iii), the transitional foreign‑held indirect subsidiary would need to have satisfied the set of requirements in either section 701C‑10 or 701C‑15

Subdivision 701C‑C—Modifications of tax cost setting rules

Table of sections

Application and object
701C‑25 Application and object of this Subdivision

Basic modification
701C‑30 Transitional foreign‑held subsidiary to be treated as part of head company

Other modifications
701C‑35 Trading stock value not set for assets of transitional foreign‑held subsidiaries
701C‑40 Cost setting rules for exit cases—modification of core rules
701C‑50 Cost setting rules for exit cases—reference to modification of core rule

Application and object

701C‑25  Application and object of this Subdivision

Application
 (1) This Subdivision applies if an entity (the transitional foreign‑held joining entity) that is a transitional foreign‑held subsidiary or a transitional foreign‑held indirect subsidiary becomes a subsidiary member of a consolidated group at the time (the formation time) the group comes into existence.

Object
 (2) The object of this Subdivision is to ensure that, on becoming a subsidiary member at the formation time, the tax cost of the assets of any transitional