INCOME TAX ASSESSMENT ACT 1997 - SECT 719.755 Effect on MEC group cost setting rules if head company is losing entity or gaining entity for indirect value shift
INCOME TAX ASSESSMENT ACT 1997 - SECT 719.755
Effect on MEC group cost setting rules if head company is losing entity or gaining entity for indirect value shift(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.)
(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.
(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).