Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p56
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 56/66)
Character Range: 6467431–6470295

of failure to meet conditions in section 165‑123
 (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 165‑123.

Subdivision 719‑J—MEC group cost setting rules: leaving cases

Guide to Subdivision 719‑J

719‑500  What this Subdivision is about
      When an entity ceases to be a subsidiary member of a MEC group, the tax cost setting amount for the group's membership interests in the entity is worked out in accordance with Division 711 as modified by this Division.

Table of sections
719‑505 Application and object of this Subdivision
719‑510 Modified operation of paragraphs 711‑15(1)(b) and (c)

719‑505  Application and object of this Subdivision

Application
 (1) This Subdivision applies if the old group mentioned in subsection 711‑5(1) is a *MEC group.

Object
 (2) The object of this Subdivision is to modify the rules in Division 711 so that they take account of the special characteristics of *MEC groups.

719‑510  Modified operation of paragraphs 711‑15(1)(b) and (c)
 (1) This section applies if the leaving entity mentioned in subsection 711‑15(1) is a *subsidiary member of the old group that is an *eligible tier‑1 company.
 (2) Paragraphs 711‑15(1)(b) and (c) apply as if the membership interests mentioned in those paragraphs included *pooled interests in the *eligible tier‑1 company.
Note: This subsection means that, in working out tax cost setting amounts for internal interests in the eligible tier‑1 company, section 711‑15 will allocate part of the old group's allocable cost amount for the eligible tier‑1 company to the pooled interests in the company. However, the tax cost of the pooled interests is not set according to section 711‑15. Subdivision 719‑K contains rules that set the cost of the pooled interests.

Subdivision 719‑K—MEC group cost setting rules: pooling cases

Guide to Subdivision 719‑K

719‑550  What this Subdivision is about
      This Subdivision contains cost setting rules for membership interests in eligible tier‑1 companies that are members of a MEC group, where those interests are not held by members of the group.

Table of sections
719‑555 Application and object of this Subdivision
719‑560 Pooled interests
719‑565 Setting cost of reset interests
719‑570 Cost setting amount

719‑555  Application and object of this Subdivision

Application
 (1) This Subdivision applies if:
 (a) one or more entities hold *pooled interests (the reset interests) in *eligible tier‑1 companies that are members of a *MEC group, just before a particular time (the trigger time); and
 (b) at the trigger time, either or both of these things happen to one or more of those eligible tier‑1 companies (the trigger companies):
 (i) the company ceases to be a member of the group;
 (ii) a *CGT event happens in relation to one or more