Section FM 38 — Income Tax Act 2007: Notice requirements on forming or joining consolidated group

FM 38 Notice requirements on forming or joining consolidated group When this section applies (1) This section applies when— (a) 2 or more companies choose to form a consolidated group under section FM 35 ; or (b) a company chooses to join an existing consolidated group under section FM 36 . Condition (2) Despite subsection (1), this section applies only if a company forming or joining a consolidated group remains entitled to be in the consolidated group either at the start of the relevant income year or for the notice period, as applicable. Setting out income year in notice (3) For a notice given to the Commissioner within the notice period in an income year, the company may provide that the election applies for the income year. The company is treated as in the consolidated group from the start of the income year. When notice does not specify income year (4) If the notice referred to in subsection (3) does not specify an income year, the company is treated as in the consolidated group from the start of the income year following that in which the Commissioner receives the notice. Setting out entitlement date in notice (5) Despite subsections (3) and (4), if a company becomes eligible to join a consolidated group during an income year, and the notice is given to the Commissioner within the notice period, the company may provide that the election applies from the date they first became entitled to make an election. The company is treated as in the consolidated group from that date, and part-year financial statements under section FM 14 are required. Notice period (6) In this section, notice period means 1 of the following: (a) 63 working days after the start of an income year; or (b) if the company joining, or the companies forming, the consolidated group in the income year are incorporated or formed in the same income year, 63 working days after the latest incorporation or formation; or (c) if the company or companies become entitled to make an election during an income year, 63 working days from the date they first became entitled; or (d) an extended period if the Commissioner agrees that the notice could not reasonably have been provided within the 63-day period. Anti-avoidance measure (7) Subsection (5) does not apply if it would be reasonable to conclude that an arrangement has been entered into for a purpose of enabling the company to meet the requirements of the subsection so as to defeat the intent and application of the consolidation rules. Defined in this Act: arrangement , Commissioner , company , consolidated group , consolidation rules , income year , notice , notice period , working day , Compare: 2004 No 35 ss FD 4(3)–(8) , FD 7(3)–(8)