Apportioning interest deductions and wholly owned groups

Section 45(3) Taxation (Tax Administration and Remedial Matters) Act 2011) amends section FE 6(3) of the Income Tax Act 2004 and ensures that the interest apportionment provided for under section FE 6 is able to be allocated, electively, across companies within a wholly-owned group of companies.

Section FE 6(3) of the Income Tax Act 2004 and the Income Tax Act 2007 

Key features

Section 45(3) Taxation (Tax Administration and Remedial Matters) Act 2011) amends section FE 6(3) of the Income Tax Act 2004 and ensures that the interest apportionment provided for under section FE 6 is able to be allocated, electively, across companies within a wholly-owned group of companies.

Detailed analysis

Under the 2004 Act, section FG 8(2) provided that, in relation to a wholly owned group of companies, the interest apportionment provided for under section FE 6 could be allocated electively across companies within the group of companies. This rule is a compliance cost reduction measure for wholly-owned groups of companies.

This amendment restores to the 2007 Act, the effect of section FG 8(2) of the 2004 Act.