Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:7_2:p7
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 7 cl 2 (pt 7/9)
Character Range: 81711–84325

under subsection (6) of this section in relation to the asset.
Note: This information would need to be known by the entity if it later becomes a subsidiary member of another consolidated group and still holds the asset. This is because subsection 705‑50(5) of the Income Tax Assessment Act 1997 requires a reduction in the tax cost setting amount for the asset on joining that other group and the amount chosen by the head company under this section is relevant to working out that reduction.

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 applying step 1 of the table in section 711‑20 of the Income Tax Assessment Act 1997, is equal to its market value just before the transitional group came into existence.

Division 702—Modified application of this Act to assets that an entity brings into a consolidated group

Table of sections
702‑1 Modified application of section 40‑77 of this Act to assets that an entity brings into a consolidated group
702‑5 Modified application of subsection 40‑285(6) of this Act after entity brings assets into consolidated