Document ID: chunk:federal_register_of_legislation:C2010C00648:clause:2_75
Version: federal_register_of_legislation:C2010C00648
Segment Type: clause
Provision Reference: sch 2 cl 75
Character Range: 147325–149151

75  At the end of Division 701
Add:

701‑50  Increased allocable cost amount for leaving entity if it takes privatised asset brought into group by chosen transitional entity

Application

 (1) This section provides for an addition to the step 1 amount for working out under section 711‑20 of the Income Tax Assessment Act 1997 the allocable cost amount for an entity (the leaving entity) that ceases to be a subsidiary member of the transitional group at a time (the leaving time), if:
 (a) the head company of the group holds an asset at the leaving time because the leaving entity is taken by subsection 701‑1(1) of that Act to be a part of the head company; and
 (b) the head company started to hold the asset because of that subsection when a chosen transitional entity became a subsidiary member of the group.

If entity sale situation affected asset's cost for chosen transitional entity

 (2) If:
 (a) at a time before the chosen transitional entity became a subsidiary member of the transitional group:
 (i) all of that entity's ordinary income and statutory income was not assessable income; and
 (ii) that entity held the asset; and
 (b) just after that time, some or all of that entity's ordinary income and statutory income became assessable income because another entity that later became a member of the transitional group purchased all the membership interests in the entity; and
 (c) the amount of the purchase price reasonably attributable to the asset exceeded the amount worked out under subsection (3);
the excess is added to the step 1 amount.

 (3) Work out the amount for the purposes of paragraph (2)(c) using the following table:

Amount for paragraph (2)(c)
                             If, because of the circumstances described in paragraphs (2)(a) and (b):                       The amount is: