Document ID: chunk:federal_register_of_legislation:C2024C00267:section:3:p15
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 3 (pt 15/31)
Character Range: 645058–647641

to be:
 (a) an asset of the head company because subsection 701‑1(1) (the single entity rule) of the Income Tax Assessment Act 1997 applies; or
 (b) an asset of another entity, where it became such an asset as a result of that subsection ceasing to apply on the entity ceasing to be a subsidiary member of the group;
then, despite certain provisions of that Act applying, in accordance with subsection 701‑55(2) of that Act, as if the asset were acquired for a payment equal to its tax cost setting amount:
 (c) subsection 40‑77(1) continues to apply to the asset; and
Note: This means that Division 40 of the Income Tax Assessment Act 1997 continues not to apply to an asset that is a mining, quarrying or prospecting right.
 (d) subsection 40‑77(2) continues to apply to the asset, but applies as if the reference in that subsection to the cost of the asset were a reference to the cost worked out on the basis that the asset were acquired for a payment equal to its tax cost setting amount; and
 (e) subsection 40‑77(3) continues to apply to the asset, but applies as if the reference in that subsection to the amount included in assessable income under subsection 40‑285(1) of that Act were a reference to the amount so worked out on the basis that the asset were acquired for a payment equal to its tax cost setting amount.

702‑4  Extended operation of subsection 40‑285(3)
 (1) This section applies in relation to a balancing adjustment event that occurs:
 (a) for a depreciating asset held by an entity (the final entity); and
 (b) after the asset became an asset of the head company of a consolidated group because of section 701‑1 (the single entity rule) of the Income Tax Assessment Act 1997 applying when an entity became a subsidiary member of the group.
It does not matter whether or not the final entity is the same as the head company or the entity mentioned in paragraph (b).
Note: The final entity will be different from the head company if an entity (the leaving entity) took the asset with it when leaving the group, whether or not the leaving entity brought the asset into another consolidated group before the asset came to be held by the final entity.
 (2) The final entity is entitled to a further deduction under subsection 40‑285(3) of this Act for the balancing adjustment event if the final entity would have been entitled to the deduction apart from paragraph 701‑55(2)(a) of the Income Tax Assessment Act 1997 operating at any time before the event occurred.
Note: The final entity will be entitled to the deduction apart from paragraph 701‑55(2)(a) of