Income Tax Assessment Act 1997



Division 719 - MEC groups  

Subdivision 719-F - Losses  

Maintaining the same ownership to be able to utilise loss

SECTION 719-280   Assumptions about the test company failing to meet the conditions in section 165-12  

Assume that the test company fails to meet the conditions in section 165-12 at the time an event described in subsection (2), (3) or (4) happens after the start of the * ownership test period for the focal company in relation to:

(a) the * MEC group whose * head company was the focal company; or

(b) the * potential MEC group whose membership was the same as the membership of that MEC group.


If the test company is assumed to fail to meet the conditions in section 165-12 for the claim year and the loss, the focal company is taken (under section 719-260 ) to have failed to meet those conditions.

One event is the * potential MEC group ceasing to exist.

Another event is something happening that meets these conditions:

(a) the thing happens at a time in relation to * membership interests in one or more of these entities:

(i) a company that was just before that time a * member of the * MEC group and an * eligible tier-1 company of the * top company for the MEC group;

(ii) an entity interposed between a company described in subparagraph (i) and the company that was the top company for the group just before that time;

(b) the thing does not cause the * potential MEC group to cease to exist but does cause a change in the identity of the top company for the potential MEC group.

Another event is the * MEC group ceasing to exist because there ceases to be a * provisional head company of the group. Other causes of failure to meet conditions in section 165-12

To avoid doubt, this section does not limit the circumstances in which the test company would have failed to meet the conditions in section 165-12 on the relevant assumptions set out in sections 719-270 and 719-275 .

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