Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p7
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 7/19)
Character Range: 6298172–6301027

a head company that becomes a subsidiary member of another group
 (1) This section applies if:
 (a) section 124‑784A applies in relation to an *arrangement; and
 (b) the original entity (within the meaning of that section) for the arrangement is the *head company of a *consolidated group (the acquired group) just before the arrangement was completed; and
 (c) as a result of the arrangement:
 (i) the original entity; and
 (ii) the *subsidiary members of the acquired group just before the arrangement was completed;
  become subsidiary members of another consolidated group.
Note: Sections 124‑784A and 124‑784B apply to arrangements for restructures.
 (2) For the purposes of section 124‑784B:
 (a) the original entity is taken to be the *head company of the acquired group at the completion time (within the meaning of that section) for the *arrangement; and
 (b) the operation of this Part for the head company core purposes (mentioned in subsection 701‑1(2)) in relation to:
 (i) the original entity; and
 (ii) the entities that were *subsidiary members of the acquired group just before the arrangement was completed;
  continue to have effect at the completion time for the arrangement; and
 (c) the completion time for the arrangement is taken to be the time the original entity becomes a member of the other group; and
 (d) disregard Division 701 (Core rules) in relation to the original entity becoming a member of the other group.
Note: Paragraph (b) means that, for the purposes of section 124‑784B, the subsidiary members of the acquired group are treated as part of the original entity.
 (3) The *head company of the other group may choose for:
 (a) section 701‑10 (cost to head company of assets of joining entity); and
 (b) subsection 701‑35(4) (setting value of trading stock at tax‑neutral amount); and
 (c) subsection 701‑35(5) (setting value of registered emissions unit at tax‑neutral amount);
not to apply to the original entity's assets in respect of the original entity becoming a *subsidiary member of the other group.
Note: This subsection does not affect the application of subsection 701‑1(1) (the single entity rule).

715‑925  Effect on restructures—original entity ceases being a subsidiary member
  If, as a result of an *arrangement to which section 124‑784A applies, an original entity (within the meaning of that section):
 (a) ceases to be a *subsidiary member of a *consolidated group after the completion time (within the meaning of that section) for the arrangement; and
 (b) does not become a member of another consolidated group;
then, for the purposes of section 124‑784B, the completion time for the arrangement is taken to happen at the time of the cessation.
Note: Sections 124‑784A and 124‑784B apply to arrangements for restructures.

Division 716—Miscellaneous special rules

Table of Subdivisions
716‑A