Income Tax Assessment Act 1997
This section applies if an entity (the MEC joining entity ) becomes a * subsidiary member of a * MEC group at a time (the MEC joining time ).
This section has effect for the head company core purposes set out in subsection 701-1(2) . General modifying rule 719-160(2)
The provisions mentioned in subsection (3) operate, for the purposes of setting the * tax cost of an asset of the MEC joining entity, as if each * subsidiary member of the group (including the MEC joining entity) that is an * eligible tier-1 company at the MEC joining time were a part of the * head company of the group, rather than a separate entity.
This subsection means that references in those provisions to matters internal to the group operate as if eligible tier-1 companies in the group were parts of the head company of the group. For example:
If the MEC joining entity is an eligible tier-1 company, this subsection means the assets of the entity do not have their tax cost reset at the MEC joining time. This is because Subdivision 705-A (and related provisions) reset the tax cost of assets of subsidiary members of a group, but not assets of the head company.719-160(3)
The provisions are:
(a) section 701-10 (about setting the tax cost of assets of an entity joining a group); and
(b) Subdivision 705-A ; and
(c) any other provision of this Act giving Subdivision 705-A a modified effect in circumstances other than those covered by that Subdivision.