CA ANZ Advanced Tax (Australia) Practice Questions - CA Program Elective Advanced Tax (Australia) Exam

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Under the single entity rule that applies to an Australian income tax consolidated group, how is an intra-group transaction between two wholly owned subsidiary members treated for income tax purposes?

It is recognised at market value, generating an assessable gain to the seller It is disregarded because the subsidiaries are treated as parts of the head company It is taxed only if the asset is later sold outside the group within 12 months It generates a deductible loss to the buyer but no assessable income to the seller

Correct Answer:

It is disregarded because the subsidiaries are treated as parts of the head company

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