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).