Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p11
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 11/45)
Character Range: 5935066–5937980

705‑140 Subdivision 705‑A has effect with modifications
705‑145 Order in which tax cost setting amounts are to be worked out where subsidiary members have membership interests in other subsidiary members
705‑147 Adjustment in working out step 3A of allocable cost amount to take account of membership interests held by subsidiary members in other such members
705‑155 Adjustments to restrict step 4 reduction of allocable cost amount to effective distributions to head company in respect of direct membership interests
705‑160 Adjustment to allocation of allocable cost amount to take account of owned profits or losses of certain entities that become subsidiary members
705‑163 Modified application of section 705‑57

Application and object

705‑135  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 one or more entities become *subsidiary members of a *consolidated group at the time (the formation time) it comes into existence as a consolidated group.
Note: This is the first exception to Subdivision 705‑A: see paragraph 705‑15(a).

Object
 (2) The object of this Subdivision is to modify the rules in Subdivision 705‑A (which basically determine the tax cost setting amount for assets of an entity joining an existing *consolidated group) so that they have effect, and take account of different circumstances that apply, when a consolidated group comes into existence.
Note: The main circumstance is where one of the entities has membership interests in another. In such a case, the order in which the rules in Subdivision 705‑A are applied will affect the tax cost setting amounts for the assets of the entities.

Modified application of Subdivision 705‑A

705‑140  Subdivision 705‑A has effect with modifications
 (1) Subdivision 705‑A has effect in relation to each entity becoming a *subsidiary member of the *consolidated group at the formation time in the same way as that Subdivision has effect in relation to an entity becoming a subsidiary member of a consolidated group in circumstances covered by that Subdivision.
 (2) However, that effect of Subdivision 705‑A is subject to modifications set out in this Subdivision.

705‑145  Order in which tax cost setting amounts are to be worked out where subsidiary members have membership interests in other subsidiary members

Object
 (1) The object of this section is to ensure that where, on becoming *subsidiary members, entities hold assets consisting of *membership interests in other subsidiary members, the *head company's cost of becoming the holder of the assets of all of the entities that become subsidiary members correctly reflects the group's cost of acquiring the entities.

Tax cost setting amounts to be worked out from top down
 (2) If, on becoming *subsidiary members, entities hold *membership interests in any other entities