Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:1_3:p5
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 5/10)
Character Range: 18604–21157

year the whole of an amount (the original amount) of capital expenditure by the entity.

 (2) If for some but not all of an income year an entity is a *subsidiary member of a *consolidated group or *MEC group, and:
 (a) the *head company of the group could have deducted the original amount for that income year if the entity had been a subsidiary member of the group throughout that income year; but
 (b) the entity could have deducted the original amount for that income year if throughout that income year the entity had not been a subsidiary member of any consolidated group or MEC group;
the head company can deduct for that income year a proportion of the original amount.

Note 1: Examples of when paragraphs (2)(a) and (b) could be satisfied are set out in note 1 to subsection 716‑15(2).

Note 2: If the entity is a subsidiary member of the group throughout the income year, the head company can deduct the original amount for the income year, either:
  *   because the head company is the entity referred to in subsection (1) of this section; or
  *   because of section 701‑1 (Single entity rule); or
  *   because of section 701‑5 (Entry history rule).

 (3) The proportion is worked out by multiplying the original amount by:
 • the number of days that are in the *spreading period, and on which the entity was a *subsidiary member of the group;
divided by:
 • the number of days that are in the spreading period.

Entity's deduction for a non‑membership period

 (4) If:
 (a) for some but not all of an income year, an entity is a *subsidiary member of a *consolidated group or *MEC group; and
 (b) the entity could have deducted the original amount for that income year if throughout that income year the entity had not been a subsidiary member of any consolidated group or MEC group;
the entity can deduct a proportion of the original amount for a part of the income year that is a non‑membership period for the purposes of section 701‑30.

Note 1: Section 701‑30 is about working out an entity's tax position for a period when it is not a subsidiary member of any consolidated group.

Note 2: If throughout the income year the entity is not a subsidiary member of any consolidated group or MEC group, this section does not affect the entity's ability to deduct the original amount for the income year either:
  *   because the entity is the entity referred to in subsection (1); or
  *   because of section 701‑40 (Exit history rule).

 (5) The proportion is worked out by multiplying the original amount by:
 • the number of days that