Document ID: chunk:federal_register_of_legislation:C2012A00018:clause:5_58p
Version: federal_register_of_legislation:C2012A00018
Segment Type: clause
Provision Reference: sch 5 cl 58P
Character Range: 100611–102268

58P  Single entity rule
 (1) If a person is a subsidiary member of the consolidated group or MEC group for any period in which the choice is in effect, the person and any other subsidiary member of the group are taken for the purposes covered by subsection (2) to be parts of the head company or provisional head company of the group, rather than separate persons, during that period.
Note: Despite the single entity rule, a subsidiary member of the group is jointly and severally liable for a liability of the head company: see section 721‑10 of the Income Tax Assessment Act 1997.
 (2) The purposes covered by this subsection are:
 (a) working out the head company's and subsidiary member's interests in onshore petroleum projects for any year of tax in which any of the period occurs or any later year of tax; and
 (b) working out any tax that is payable in relation to such an interest for any such year of tax; and
 (c) working out assessable receipts and deductible expenditure arising in relation to such an interest for any such year of tax.
Examples: The following are some examples of consequences of the single entity rule:
(a) a subsidiary member's interest in an onshore petroleum project becomes a part of the head company's aggregated interest in the project;
(b) a subsidiary member's assessable receipts and deductible expenditure relating to the interest are inherited by the head company along with the interest;
(c) liabilities that a subsidiary member has to pay tax before becoming a member of the group (and any interest charges associated with such a liability) remain liabilities of the subsidiary member and not the head company.