Document ID: chunk:federal_register_of_legislation:C2010C00184:clause:1_4:p2
Version: federal_register_of_legislation:C2010C00184
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 2/3)
Character Range: 60820–63572

main objects of this Subdivision are:
 (a) to allow the head company of a consolidated group to apply, in relation to an income year, pre‑commencement excess foreign income tax of an entity (the joining entity) that becomes a subsidiary member of the group at a time (the joining time) if:
 (i) the income year starts at or after the joining time; and
 (ii) that pre‑commencement excess foreign income tax is from an income year ending before the joining time; and
 (b) to prevent the joining entity from applying pre‑commencement excess foreign income tax mentioned in subparagraph (a)(ii) to increase its own tax offset under Division 770 of the Income Tax Assessment Act 1997 (the 1997 Act).

770‑290  Transferring subsidiary member's pre‑commencement excess foreign income tax to head company

 (1) This section operates for the purposes of section 770‑220 in relation to an income year if:
 (a) an entity (the joining entity) becomes a subsidiary member of a consolidated group at a time (the joining time); and
 (b) the joining time is before or at the start of that income year; and
 (c) the joining entity has pre‑commencement excess foreign income tax (the transferred foreign income tax) from an earlier income year.

 (2) For those purposes:
 (a) the head company of the group is taken to have the transferred foreign income tax; and
 (b) if, apart from paragraph (a), the head company has pre‑commencement excess foreign income tax from the earlier year—the transferred foreign income tax is taken to be included in that pre‑commencement excess foreign income tax.

 (3) Subsection (2) also has effect for the purposes of a subsequent operation of this section.

770‑295  Where entity not subsidiary member for whole of income year

 (1) This section operates if:
 (a) an entity (the joining entity) is a subsidiary member of a consolidated group for some but not all of an income year (the joining year); and
 (b) there are one or more periods in the joining year (each of which is a non‑membership period) during which the entity is not a subsidiary member of any consolidated group.

Note: Section 701‑30 of the 1997 Act treats each non‑membership period as a separate income year for some purposes.

 (2) Subsection (3) has effect for the purposes of section 701‑30 of the 1997 Act in relation to the joining entity.

 (3) In working out amounts for the joining entity under subsection 701‑30(3) of the 1997 Act in relation to each non‑membership period, assume that, if the joining year starts at the same time as the earliest of those non‑membership periods, section 770‑230 operates in relation to the joining entity for that non‑membership period.

770‑300  Pre‑commencement excess foreign income tax lost on joining consolidated