Income Tax Assessment Act 1997
SECTION 719-790 Exception for interests in entity leaving MEC group
Membership interests in leaving entity
719-790(1)
If:
(a) the realised interest is a * membership interest; and
(b) during the ownership period the first entity ceased to be a * subsidiary member of a * MEC group;
the first condition in section 719-775 cannot be satisfied, because of that MEC group, at a time when the first entity was a member of the group, unless the interest needed to be disregarded under section 719-30 (about employee shares) in order for the first entity to be a member of the group at that time.
Liabilities owed by leaving entity
719-790(2)
If the realised interest:
(a) consists of a liability owed by the first entity to the owner; and
(b) became an asset of the owner because subsection 701-1(1) (the single entity rule) ceased to apply to the first entity when it ceased to be a * subsidiary member of a * MEC group;
the first condition in section 719-775 cannot be satisfied, because of that MEC group, at a time when the first entity was a member of the group.
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