Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_2:p3
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 2 (pt 3/11)
Character Range: 7497–10133

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 member remained with the head company after the entity ceased to be a subsidiary member.

Entity core purposes

 (3) The purposes covered by this subsection (the entity core purposes) are:
 (a) working out the amount of the entity'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 entity's loss (if any) of a particular *sort for any such income year.

Note: An assessment of the entity's liability calculated by reference to income tax for a period when it was not a subsidiary member of the group may be made, and that tax recovered from it, even while it is a subsidiary member.

What is a sort of loss?

 (4) Each of these paragraphs identifies a sort of loss:
 (a) *tax loss;
 (b) *film loss;
 (c) *net capital loss;
 (d) overall foreign loss in respect of interest income (within the meaning of section 160AFD of the Income Tax Assessment Act 1936);
 (e) overall foreign loss in respect of modified passive income (within the meaning of that section);
 (f) overall foreign loss in respect of offshore banking income (within the meaning of that section);
 (g) overall foreign loss in respect of other assessable foreign income (within the meaning of that section).
This subsection lists all the sorts of loss.

Head company rules

701‑5  Entry history rule

  For the head company core purposes in relation to the period after the entity becomes a *subsidiary member of the group, everything that happened in relation to it before it became a subsidiary member is taken to have happened in relation to the *head company.

Note: Other provisions of this Part may affect the tax history that is inherited (e.g. asset cost base history is affected by section 701‑10 and tax loss history is affected by Division 707).

701‑10  Cost to head company of assets that entity brings into group

 (1) This section has effect for the head company core purposes when the entity becomes a *subsidiary member of the group.

Assets to which section applies

 (2) This section applies in relation to each asset that becomes an asset of the *head company because subsection 701‑1(1) (the single entity rule) applies.

Object

 (3) The object of this section (and Division 705 which relates to it) is to recognise the cost to the *head company of such assets as an amount reflecting the