Two or more companies owned by the same shareholders can be treated as a single entity. Wholly owned companies can choose to be treated as a consolidated group of companies.
Consolidating your company
Consolidated, wholly owned 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 continuity of the group, not of the individual member
- offset imputation credits within the group, even though ordinary imputation credit rules do not permit the grouping of imputation credits.
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 cease to be 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 ceases to have a nominated company.