Section 715 — Income Tax Assessment Act 1997 (Cth)

(1) The object of this Subdivision is to give effect to the purposes of Subdivision 165‑CC (about change of ownership or control of a company that has an unrealised net loss) in these cases:

(a) on formation of a *consolidated group, a *CGT asset held directly by the *head company is affected by that Subdivision, and the *business continuity test is failed;

(b) on an entity becoming a *subsidiary member of a consolidated group, an asset consisting of:

(i) a *membership interest that a *member of the group (including a chosen transitional entity under Division 701 of the Income Tax (Transitional Provisions) Act 1997) holds in the entity; or

(ii) a liability that the entity owes to such a member;

is affected by that Subdivision, and the business continuity test is failed;

(c) on a company becoming a subsidiary member:

(i) a CGT asset of the company that becomes an asset of the head company is affected by that Subdivision; and

(ii) because the company is a chosen transitional entity, the asset does not have its tax cost reset; and

(iii) the business continuity test is failed;

(d) on an entity ceasing to be a subsidiary member, a CGT asset of the head company that becomes an asset of the entity is affected by that Subdivision, and the business continuity test is failed.

Note: Subdivision 165‑CC also affects an entity that has deferred losses under Subdivision 170‑D on assets that it formerly owned. Subdivision 715‑D gives effect to the purposes of Subdivision 165‑CC if such an entity becomes a member of a consolidated group.

(2) This Subdivision achieves its object by supplementing and modifying the application of Subdivision 165‑CC to take account of how the rest of this Part treats *members of a *consolidated group (in particular the provisions about entities becoming or ceasing to be members).

Related sections

• s 709 — ‑50  What this Subdivision is about
• s 711 — ‑1  What this Division is about
• s 713 — ‑20  Increasing the step 1 amount for settled capital that could be distributed tax free in respect of discretionary interests
• s 716 — ‑1  What this Division is about
• s 717 — ‑1  What this Subdivision is about
• s 719 — ‑2  Modified application of Part 3‑90 to MEC groups

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