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 719-280   Assumptions about the test company failing to meet the conditions in section 165-12  

719-280(1)    
Assume that the test company fails to meet the conditions in section 165-12 at the time an event described in subsection (2), (3) or (4) happens after the start of the ^* ownership test period for the focal company in relation to:

(a) the ^* MEC group whose ^* head company was the focal company; or

(b) the ^* potential MEC group whose membership was the same as the membership of that MEC group.

Note:

If the test company is assumed to fail to meet the conditions in section 165-12 for the claim year and the loss, the focal company is taken (under section 719-260 ) to have failed to meet those conditions.

719-280(2)    
One event is the ^* potential MEC group ceasing to exist.

719-280(3)    
Another event is something happening that meets these conditions:

(a) the thing happens at a time in relation to ^* membership interests in one or more of these entities:

(i) a company that was just before that time a ^* member of the ^* MEC group and an ^* eligible tier-1 company of the ^* top company for the MEC group;

(ii) an entity interposed between a company described in subparagraph (i) and the company that was the top company for the group just before that time;

(b) the thing does not cause the ^* potential MEC group to cease to exist but does cause a change in the identity of the top company for the potential MEC group.

719-280(4)    
Another event is the ^* MEC group ceasing to exist because there ceases to be a ^* provisional head company of the group.

Other causes of failure to meet conditions in section 165-12

719-280(5)    
To avoid doubt, this section does not limit the circumstances in which the test company would have failed to meet the conditions in section 165-12 on the relevant assumptions set out in sections 719-270 and 719-275 .