On 17 July 2019, the Australian Taxation Office (ATO) issued Law Companion Ruling (LCR) 2019/2 - Consolidation: churning of joining entities. The ruling concerns the application of the churning measure introduced by the Treasury Laws Amendment (Income Tax Consolidation Integrity) Act 2018.

Under prior law, when an entity is acquired by a consolidated group from a foreign resident, the entry t…