Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:4_4:p3
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 4 cl 4 (pt 3/10)
Character Range: 66293–69027

acquired group; and
 (b) the operation of this Part for the head company core purposes in relation to the head company and the entities that were *subsidiary members of the acquired group continued to have effect for the purposes of Subdivision 705‑A.

Note 1: This means that for Subdivision 705‑A purposes the subsidiary members of the acquired group are treated as part of the head company of that group, and as a result their assets (other than e.g. internal membership interests) have their tax costs set at the acquisition time.

Note 2: It also means e.g. that for Subdivision 705‑A purposes the terminating values of the assets of those subsidiary members are worked out as if the assets were those of the head company at the acquisition time, and hence will be based (if applicable) on the tax cost setting amounts for assets that were set at the time entities became subsidiary members of the acquired group.

 (2) However, that effect of Subdivision 705‑A is subject to modifications set out in this Subdivision.

Note: The modifications of Subdivision 705‑A made in this Subdivision constitute the second exception to Subdivision 705‑A: see paragraph 705‑15(b).

Modifications of Subdivision 705‑A for the purposes of this Subdivision

705‑190  Modified application of section 705‑50

Object

 (1) The object of this section is to ensure that there is no reduction in the *tax cost setting amount of *over‑depreciated assets that were brought into the acquired group by an entity on becoming a *subsidiary member, where the over‑depreciation will already be corrected as a result of distributions made to the acquired group before that time.

Exclusion of pre‑joining distributions to members of acquired group

 (2) If, before it became a *subsidiary member of the acquired group, an entity that is a subsidiary member of the acquired group at the acquisition time paid a dividend to which paragraph 705‑50(2)(b) applies, paragraph 705‑50(3)(b) also has effect as if the reference in that paragraph to a taxpayer who was not entitled to a rebate of income tax under section 46 or 46A of the Income Tax Assessment Act 1936 included a reference to:
 (a) if the acquired group existed at that time—a *member of that group; or
 (b) if not—an entity that later became a member of that group.

705‑195  Modified application of subsection 705‑65(6)

Object

 (1) The object of this section is to ensure that certain rights or options held by *members of the acquiring group that are part of the cost of acquiring the acquired group are taken into account in working out the acquiring group's *allocable cost amount for the acquired group.

Certain rights or options relating to the acquired group to be treated in same way