Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_2:p2
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 2/11)
Character Range: 4950–7726

of the same economic gain realised by a consolidated group; and
 (b) to prevent a double tax benefit being obtained from an economic loss realised by a consolidated group; and
 (c) to provide a systematic solution to the prevention of such double taxation and double tax benefits that will:
 (i) reduce the cost of complying with this Act; and
 (ii) improve business efficiency by removing complexities and promoting simplicity in the taxation of wholly‑owned groups.

Division 701—Core rules

Table of sections

Common rule

701‑1 Single entity rule

Head company rules

701‑5 Entry history rule
701‑10 Cost to head company of assets that entity brings into group
701‑15 Cost to head company of membership interests in entity that leaves group
701‑20 Cost to head company of assets consisting of certain liabilities owed by entity that leaves group
701‑25 Tax‑neutral consequence for head company of ceasing to hold assets when entity leaves group

Entity rules

701‑30 Where entity not subsidiary member for whole of income year
701‑35 Tax‑neutral consequence for entity of ceasing to hold assets when it joins group
701‑40 Exit history rule
701‑45 Cost of assets consisting of liabilities owed to entity by members of the group
701‑50 Cost of certain membership interests of which entity becomes holder on leaving group

Supporting provisions

701‑55 Setting the tax cost of an asset
701‑60 Tax cost setting amount
701‑65 Net income and losses for trusts and partnerships

Exceptions

701‑70 Adjustments to taxable income where identities of parties to arrangement merge on joining group
701‑75 Adjustments to taxable income where identities of parties to arrangement re‑emerge on leaving group
701‑80 Accelerated depreciation
701‑85 Other exceptions etc. to the rules

Common rule

701‑1  Single entity rule

 (1) If an entity is a *subsidiary member of a *consolidated group for any period, it and any other subsidiary member of the group are taken for the purposes covered by subsections (2) and (3) to be parts of the *head company of the group, rather than separate entities, during that period.

Head company core purposes

 (2) The purposes covered by this subsection (the head company core purposes) are:
 (a) working out the amount of the *head company's liability (if any) for income tax calculated by reference to any income year in which any of the period occurs or any later income year; and
 (b) working out the amount of the head company's loss (if any) of a particular *sort for any such income year.

Note: The single entity rule would affect the head company's income tax liability calculated by reference to income years after the entity ceased to be a member of the group if, for example, assets that the entity held when it became a subsidiary