Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-T - Interactions between this Part and other areas of the income tax law: special rules for MEC groups  

How indirect value shifting rules apply to a MEC group

SECTION 719-755   Effect on MEC group cost setting rules if head company is losing entity or gaining entity for indirect value shift  

719-755(1)    
This section has effect for the purposes of working out the consequences (if any) of an * indirect value shift if the * losing entity or * gaining entity is the * head company of a * MEC group. (Subsection (3) has effect in addition to section 727-455 .)

719-755(2)    
An * equity or loan interest can be an * affected interest in the * head company only if it is:


(a) an * equity or loan interest in the * top company for the MEC group; or


(b) an * indirect equity or loan interest in the top company.

719-755(3)    
Subdivision 719-K (MEC group cost setting rules: pooling cases) applies to the * MEC group, in relation to the first time referred to in that Subdivision as a trigger time that happens at or after the * IVS time, on the basis that:


(a) what would, apart from this section, be the pooled cost amount for the purposes of the formulas in subsections 719-570(1) and (2) is:


(i) if the * head company is the * losing entity - reduced; or

(ii) if the head company is the gaining entity - increased;
by the amount of the indirect value shift; and


(b) paragraph (a) of this subsection also affects the application of those formulas because of subsection 719-570(3) (to work out the * reduced cost base of a * membership interest).



 

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