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Two or more companies that are 100% owned by the same shareholders can become a consolidated group. This means they are treated as a single entity for tax purposes.

What consolidated companies can do

Consolidated groups of companies can:

  • transfer assets within the consolidation group, with deferred income tax liabilities
  • pay exempt dividends between companies
  • claim deductions for administration and other costs of holding companies that may not be deductible to the holding company that incurred the expenditure
  • use losses incurred by group members by referring to shareholding or business continuity requirements of the group, not of the individual member
  • offset imputation credits within the group, even though ordinary imputation credit rules do not allow imputation credits to be grouped.

Leaving the consolidated group

A company can leave a consolidated group by notifying us.

They will no longer be treated as a member from the beginning of the income year we receive the notice in.

If the company requests it they can be treated as a non member for the income year after we receive their notice.

Companies can also stop being a member of a consolidated group when they:

  • lose their eligibility status
  • are no longer entitled to be a member of the same consolidated group
  • belong to a consolidated group that stops having a nominated company (the company selected to file income tax returns on behalf of the group).
Last updated: 28 Apr 2021
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