Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-K - MEC group cost setting rules: pooling cases  

SECTION 719-555   Application and object of this Subdivision  

Application

719-555(1)    
This Subdivision applies if:

(a) one or more entities hold ^* pooled interests (the reset interests ) in ^* eligible tier-1 companies that are members of a ^* MEC group, just before a particular time (the trigger time ); and

(b) at the trigger time, either or both of these things happen to one or more of those eligible tier-1 companies (the trigger companies ):

(i) the company ceases to be a member of the group;

(ii) a ^* CGT event happens in relation to one or more reset interests in the company; and

(c) the ^* market value of the reset interests as a whole (including the market value of synergies arising from the combination of those interests) just before the trigger time is more than nil.

Object

719-555(2)    
The object of this Subdivision is to set the cost of all reset interests:

(a) first, by allocating to each reset interest held in a trigger company so much of the total cost of all reset interests held in members of the group that the ^* market value of the interest bears to the group's market value; and

(b) then, by allocating the remainder of that total cost to all reset interests held in other ^* eligible tier-1 companies, by dividing that remainder by the number of those interests.