Income Tax (Transitional Provisions) Act 1997

This section reduces the adjustable value of a notional asset that section 40‑35, 40‑37, 40‑38, 40‑40 or 40‑43 treats the head company of a consolidated group as holding, if:

an entity (the leaving entity) ceases to be a subsidiary member of the group at a time (the leaving time); and

that section treats the leaving entity as holding a notional asset because of section 701‑40 (Exit history rule) of the Income Tax Assessment Act 1997.

Section 701‑40 (Exit history rule) of the Income Tax Assessment Act 1997 treats as expenditure of the leaving entity certain expenditure incurred before the leaving time in relation to an asset or business that was an asset or business of the leaving entity at the leaving time.

The adjustable value of the head company’s notional asset is reduced at the leaving time by the adjustable value of the leaving entity’s notional asset at that time.