Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:9_2:p1
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 9 cl 2 (pt 1/5)
Character Range: 128382–131131

2  After Division 701
Insert:

Division 701A—Modified application of provisions of Income Tax Assessment Act 1997 for entities with continuing majority ownership from 27 June 2002 until joining a consolidated group

Table of sections

701A‑1 Continuing majority‑owned entity, designated group etc.
701A‑5 Modified application of Part 3‑90 of Income Tax Assessment Act 1997 to trading stock of continuing majority‑owned entity
701A‑10 Modified application of Part 3‑90 of Income Tax Assessment Act 1997 to certain internally generated assets of continuing majority‑owned entity

701A‑1  Continuing majority‑owned entity, designated group etc.

Continuing majority‑owned entity and designated group

 (1) If:
 (a) an entity becomes a subsidiary member of a consolidated group at any time on or after 1 July 2002; and
 (b) a person or persons continued to be the majority owners (see subsection (2)) of the entity from the start of 27 June 2002 until the entity became a subsidiary member of the group;
the entity is a continuing majority‑owned entity and the group is the entity's designated group.

Majority owners of an entity

 (2) A person or persons are the majority owners of an entity if they beneficially own, directly or indirectly through one or more interposed entities, membership interests in the entity whose market value is more than 50% of the market value of all of the membership interests in the entity.

Interposed non‑fixed trust to be treated as fixed trust

 (3) For the purposes of subsection (2), if the interposed entity or any of the interposed entities is a trust that is not a fixed trust:
 (a) it is treated as if it were a fixed trust; and
 (b) all of its objects are treated as if they were beneficiaries of that trust with equal interests in it.

701A‑5  Modified application of Part 3‑90 of Income Tax Assessment Act 1997 to trading stock of continuing majority‑owned entity

 (1) The operation of Part 3‑90 of the Income Tax Assessment Act 1997 is modified in accordance with this section in relation to each asset of a continuing majority‑owned entity that is trading stock just before the entity becomes a subsidiary member of the entity's designated group.

Continuing majority‑owned entity to revalue its trading stock under normal provisions

 (2) For the entity core purposes:
 (a) subsection 701‑35(4) of the Income Tax Assessment Act 1997 does not apply in relation to the asset; and
 (b) instead, the value of the asset at the end of the income year that ends, or, if section 701‑30 of that Act applies, of the income year that is taken by subsection (3) of that section to end, is the value determined in accordance with sections 70‑45 to 70‑70 of that Act.

For head company, trading stock to be