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Chapter 26 in
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Chapter 26: A framework for consolidation
|Framework design principles|
Consolidation to be optional, but if a group decides to consolidate, all its wholly owned Australian resident entities must consolidate.
Consolidated groups to be treated as a single entity.
Current group provisions to be repealed.
Individual entity losses and franking account balances able to be brought into the consolidated group.
Carry-forward losses and franking balances to remain with the consolidated group on an entitys exit.
Provisions to be established for determining the cost bases on exit.
consists of all wholly owned entities of the head entity.
Inclusion of discretionary and hybrid trusts depends on situation.
Family trusts and companies consolidate under general entity consolidated regime or modified trust loss measures.
Decision to consolidate is irrevocable.
Accounting treatment for consolidated group based on control test.
benefits of single entity treatment;
tax attributes to apply on entry and exit;
effect on characterisation of transactions;
implications for international taxation; and
implications for CGT regime.
current group concessions?
would replace grouping provisions. Grouping provisions have problems: integrity issues;
and compliance costs.
How would non-electing groups be taxed?
Taxed as separate entities.
entities bring in carry-forward losses on entry into a consolidated group?
Option 1 Do
not allow losses into a consolidated group, apart from two limited (transitional) cases.
What franking credits and foreign tax credits could entities bring into a consolidated group?
carry-forward losses could entities
take when exiting a consolidated group?
What franking credits and foreign tax credits could entities take when exiting a consolidated group?
|See Chapter 27.|