Published on 11 Aug 07
by WESTERN AUSTRALIAN DIVISION, THE TAX INSTITUTE
Various aspects of the income tax consolidation rules in Part 3-90 of the Income Tax Assessment Act 1997 (Cth) still do not work properly. This paper focusses on a number of these aspects, including:
- the operation of the company loss recoupment rules as loss transfer tests
- the modifications to the 'same business test' for income tax consolidated groups
- peculiar outcomes under the 'single entity rule'
- the private ruling system and restructures of consolidated groups
- weaknesses in the Tax Sharing Agreement and 'clear exit payment' rules
- anomalies in relation to CGT event L5 and the acquisition of a consolidated group
- the exclusion from CGT event J1 in relation to entities that leave:
- income tax consolidated groups
- multiple entry consolidated (MEC) groups
These aspects also provide a context within which the paper will consider a selection of recent legislative amendments and ATO rulings.
Duncan R C BAXTER
Duncan is Head of the National Tax Team at Blake Dawson. He was previously a Partner in the
International Tax Group of a global accounting firm. Earlier this year Duncan served as one of the three private
sector representatives on the Federal Government’s Tax Design Review Panel.
Current at 11 March 2009 Current at 14 May 2009
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