Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-F - Losses  

Maintaining the same ownership to be able to utilise loss

SECTION 719-275   Assumptions about nothing happening to affect direct and indirect ownership of the test company  

719-275(1)    
This section sets out an assumption that must be made whenever an event described in subsection (2) occurs:

(a) after the time assumed under section 719-270 to be the start of the income year for which the test company made the loss; and

(b) before the end of the claim year;

(whether or not the test company or the focal company is one of the companies mentioned in the description of the event).

719-275(2)    
Assume that, after an event described in an item of the table, nothing happens in relation to ^* membership interests or voting power in an entity described in the item that would affect whether the test company would meet the conditions in section 165-12 for the claim year and the loss.

Assumption about nothing happening to membership interests or voting power
	If this event occurs:	Assume that nothing happens in relation to membership interests or voting power in:
1	There is a *COT transfer of the loss to the *head company of a *MEC group (but not from a company that was the head company of another MEC group just before the transfer)	The transferor or an entity that was at the time of the transfer interposed between the transferor and the *top company for the MEC group
2	There is a *COT transfer of the loss to the *head company of a *MEC group from a company that was the head company of another MEC group just before the transfer	The company that was just before the transfer the *top company for the other MEC group, or an entity that was at the time of the transfer interposed between that company and the top company of the MEC group to whose head company the loss was transferred
3	There is a change in the identity of the *top company for a *MEC group whose *head company has made the loss	The company that ceased to be the top company for the MEC group as part of the change or an entity that was at the time of the change interposed between that company and the company that became the top company for the MEC group as part of the change
4	A company that has made the loss becomes at a time the *head company of a *MEC group (as the first company to be the head company of the group) and has not before that time transferred the loss to another company under Subdivision 707-A	The company or an entity that was at the time interposed between the company and the *top company for the MEC group
5	There is a *COT transfer of the loss to the *head company of a *consolidated group from another company	The other company or an entity that was at the time of the transfer interposed between the other company and the head company

719-275(3)    
For the purposes of this section, a company is taken to make a loss:

(a) at the start of the income year for which the company makes the loss, if it makes the loss apart from a transfer under Subdivision 707-A (even if the company later transfers the loss to itself under that Subdivision); or

(b) at the time the loss is transferred to the company under that Subdivision, if the company makes the loss because of that transfer.

719-275(4)    
Disregard section 719-90 for the purposes of making an assumption on the basis of item 1 of the table in subsection (2) of this section if (apart from that section):

(a) the ^* COT transfer mentioned in that item was from the ^* head company of the ^* MEC group to itself; and

(b) for an income year starting after the transfer, another company was the head company of the group.