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 719-570   Cost setting amount  

Reset interests held in trigger companies - cost setting amount for cost base etc.

719-570(1)    

Work out the cost setting amount for the purposes of subsections 719-565(1) and (3) for a reset interest in a trigger company using the formula:

*Market value of the reset interest *Market value of the group

×   Pooled cost amount

where:

market value of the group
is:

(a) if every ^* eligible tier-1 company that is a member of the group just before the trigger time is a trigger company - the sum of the ^* market value (just before the trigger time) of all reset interests in each of those companies; or

(b) otherwise - the amount mentioned in paragraph 719-555(1)(c).

market value of the reset interest
is the *market value (just before the trigger time) of all reset interests in that trigger company, in the same class as the interest, divided by the number of reset interests in that company in that class.

pooled cost amount
is the sum of the ^* cost bases (just before the trigger time) of all reset interests.

Reset interests held in other eligible tier-1 companies - cost setting amount for cost base etc.

719-570(2)    
Work out the cost setting amount for the purposes of subsections 719-565 (1) and (3) for a reset interest that is not in a trigger company, using the formula:

Pooled cost amount − Amount allocated to trigger company interests Number of non-trigger company interests

where:

amount allocated to trigger company interests
is the sum of all cost setting amounts worked out under subsection (1) for the reset interests covered by that subsection.

number of non-trigger company interests
is the number of reset interests, other than those covered by subsection (1).

pooled cost amount
has the same meaning as in subsection (1).

Cost setting amount for reduced cost base

719-570(3)    
Work out the cost setting amount for the purposes of subsection 719-565(2) for a reset interest by applying subsections (1) and (2) of this section in relation to the interest, as if every reference in those subsections to ^* cost base were a reference to ^* reduced cost base.