Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:19_5:p1
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 19 cl 5 (pt 1/2)
Character Range: 280350–283011

5  After section 707‑328
Insert:

707‑328A  Some events involving only group members not covered by rule against inflation of modified market value

Overview

 (1) Subsection (3) of this section affects the calculation, under section 707‑325 of the Income Tax Assessment Act 1997 and section 707‑325 of this Act, of the modified market value of the real loss‑maker mentioned in subsection 707‑315(1) of that Act for a bundle of losses, but only if:
 (a) the requirement in subsection (2) of this section is met in relation to each other company that became a member of the group mentioned in subsection 707‑315(1) of that Act in connection with the bundle at the time (the formation time) the group became a consolidated group; and
 (b) the provisions described in subsection 707‑327(4) of this Act operate (because of that subsection) in relation to each loss of such a company that is covered by paragraphs 707‑327(1)(b) and (c) of this Act as if the bundle included the loss; and
 (c) all members of the group at the formation time were companies; and
 (d) subsection 707‑325(2) of that Act does not operate, for the purposes of working out the modified market value of an entity that became a member of the group at the formation time, because of an event that involved an entity that did not become a member of the group then; and
 (e) the transferee mentioned in subsection 707‑325(1) of this Act chooses that this section apply in relation to the real loss‑maker.

 (2) Section 707‑325 of this Act must apply in relation to the other company (as value donor) so that the available fraction for the bundle is to be worked out as if there were added to the real loss‑maker's modified market value an amount worked out by reference to the other company's modified market value at the initial transfer time.

Disregarding events for purposes of anti‑inflation rule

 (3) Disregard for the purposes of subsection 707‑325(2) of the Income Tax Assessment Act 1997 an event that is described in subsection 707‑325(4) of that Act and was either:
 (a) an injection of capital into an entity that became a member of the group at the formation time by another such entity; or
 (b) a transaction that involved only entities that became members of the group at the formation time.

Note: Disregarding such an event could have a direct or indirect effect on the real loss‑maker's modified market value for the purposes of working out the available fraction for the bundle in one of these ways:

(a) it could directly affect the real loss‑maker's modified market value calculated under section 707‑325 of the Income Tax Assessment Act 1997, if the real loss‑maker was