Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p16
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 16/17)
Character Range: 602759–605395

the requirements of subsections (2) to (4) are satisfied.

Asset held at leaving time
 (2) Just before the entity ceases to be a subsidiary member, it must, disregarding subsection 701‑1(1) (the single entity rule) of the Income Tax Assessment Act 1997, hold an asset.

Reduction of asset's tax cost setting amount for over‑depreciation
 (3) When the transitional group came into existence:
 (a) the asset must have become that of the head company of the transitional group because subsection 701‑1(1) of that Act applied in relation to a transitional entity; and
 (b) former section 705‑50 of that Act must have reduced by an amount (the reduction amount) the tax cost setting amount for the asset.

Asset held continuously within group
 (4) The asset must, disregarding subsection 701‑1(1) of that Act, have been held at all times by the head company or a subsidiary member of the transitional group from when the transitional group came into existence until the entity ceases to be a subsidiary member of the transitional group.

Head company's choice
 (6) If this section applies, the head company may, in relation to the entity's ceasing to be a subsidiary member, choose that the terminating value for the asset, that is to be used in applying step 1 of the table in section 711‑20 of the Income Tax Assessment Act 1997, is increased by so much of the reduction amount as the head company chooses.

701‑45  When entity leaves transitional group, head company may choose, for purposes of transitional group's allocable cost amount, to use formation time market values, instead of terminating values, for certain pre‑CGT assets
 (1) This section applies if:
 (a) an entity ceases to be a subsidiary member of the transitional group; and
 (b) just before the transitional group came into existence, the entity that became the head company held a pre‑CGT asset; and
 (c) that holding of the asset did not occur as a result of a CGT event:
 (i) for which there was a roll‑over under Subdivision 126‑B of the Income Tax Assessment Act 1997; and
 (ii) that occurred after 11.45 am by legal time in the Australian Capital Territory on 21 September 1999; and
 (d) just before the entity ceases to be a subsidiary member of the group, the asset is still a pre‑CGT asset and is held by the head company only because the entity is taken by subsection 701‑1(1) (the single entity rule) of the Income Tax Assessment Act 1997 to be a part of the head company.
 (2) If this section applies, the head company may, in relation to the entity's ceasing to be a subsidiary member, choose that the terminating value for the asset, that is to be used in