Document ID: chunk:federal_register_of_legislation:C2010C00605:clause:2_10:p2
Version: federal_register_of_legislation:C2010C00605
Segment Type: clause
Provision Reference: sch 2 cl 10 (pt 2/3)
Character Range: 39059–41814

this section) be taken to have happened in relation to the interposed company before that time;
just as if, at all times before the completion time:
 (c) the interposed company had been the original company; and
 (d) the original company had been the interposed company.

Note: This section treats the original company and the interposed company as having in effect exchanged identities throughout the period before the completion time, but without affecting any of the original company's other attributes.

 (2) To avoid doubt, subsection (1) also covers everything that, immediately before the completion time, was taken, because of:
 (a) section 701‑1 (Single entity rule); or
 (b) section 701‑5 (Entry history rule); or
 (c) one or more previous applications of this section; or
 (d) section 719‑90 (about the effects of a change of head company of a MEC group);
to have happened in relation to the original company.

 (3) Subsections (1) and (2) have effect:
 (a) for the head company core purposes in relation to an income year ending after the completion time; and
 (b) for the entity core purposes in relation to an income year ending after the completion time; and
 (c) for the purposes of determining the respective balances of the *franking accounts of the original company and the interposed company at and after the completion time.

 (4) Subsections (1) and (2) have effect subject to:
 (a) section 701‑40 (Exit history rule); and
 (b) a provision of this Act to which section 701‑40 is subject because of section 701‑85 (about exceptions to the core rules in Division 701).

Note: An example of provisions covered by paragraph (b) of this subsection is Subdivision 717‑E (about transferring to a company leaving a consolidated group various surpluses under the CFC and FIF rules in Parts X and XI of the Income Tax Assessment Act 1936).

703‑80  Effects on the original company's tax position

  In applying section 701‑30 to the original company for the income year that includes the completion time, disregard a non‑membership period that starts before the completion time.

Note 1: Section 701‑30 is about working out an entity's tax position for a period when it is not a subsidiary member of any consolidated group. Its application can also affect the entity's tax position in later income years.

Note 2: Under section 703‑75 the interposed company inherits the original company's tax position for the part of the income year that ends before the completion time, with the consequence that the original company's taxable income, income tax payable, and losses of any sort, for that part are each nil.

 Because of section 703‑75 and this section, the only tax payable by the original company for the income year arises because of the