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INCOME TAX ASSESSMENT ACT 1997 - SECT 719.570

Cost setting amount

Reset interests held in trigger companies--cost setting amount for cost base etc.

             (1)  Work out the cost setting amount for the purposes of subsections 719-565 (1) and (3) for a reset interest in a trigger company using the formula:

where:

"market value of the group" is:

                     (a)  if every * eligible tier-1 company that is a member of the group just before the trigger time is a trigger company--the sum of the * market value (just before the trigger time) of all reset interests in each of those companies ; or

                     (b)  otherwise--the amount mentioned in paragraph 719-555 (1)(c) .

"market value of the reset interest" is the * market value (just before the trigger time) of all reset interests in that trigger company, in the same class as the interest, divided by the number of reset interests in that company in that class.

"pooled cost amount" is the sum of the * cost bases (just before the trigger time) of all reset interests.

Reset interests held in other eligible tier-1 companies--cost setting amount for cost base etc.

             (2)  Work out the cost setting amount for the purposes of subsections 719-565 (1) and (3) for a reset interest that is not in a trigger company, using the formula:

where:

"amount allocated to trigger company interests" is the sum of all cost setting amounts worked out under subsection (1) for the reset interests covered by that subsection.

"number of non-trigger company interests" is the number of reset interests, other than those covered by subsection (1).

"pooled cost amount" has the same meaning as in subsection (1).

Cost setting amount for reduced cost base

             (3)  Work out the cost setting amount for the purposes of subsection 719-565 (2) for a reset interest by applying subsections (1) and (2) of this section in relation to the interest, as if every reference in those subsections to * cost base were a reference to * reduced cost base.

Table of sections

How Subdivision 165-CC applies to MEC groups

719-700    Changeover times under section 165-115C or 165-115D

719-705    Additional changeover times for head company of MEC group

How Subdivision 165-CD applies to MEC groups

719-720    Alteration times under section 165-115L or 165-115M

719-725    Additional alteration times for head company of MEC group

719-730    Some alteration times only affect interests in top company

719-735    Some alteration times affect only pooled interests

719-740    Head company does not have relevant equity or debt interest in a loss company if widely held top company does not have such an interest

How indirect value shifting rules apply to a MEC group

719-755    Effect on MEC group cost setting rules if head company is losing entity or gaining entity for indirect value shift

Cancelling loss on realisation event for direct or indirect interest in a subsidiary member of a MEC group

719-775    Cancellation of loss

719-780    Exception for pooled interests in eligible tier-1 companies

719-785    Exception for interests in top company

719-790    Exception for interests in entity leaving MEC group

719-795    Exception if loss attributable to certain matters

How Subdivision 165-CC applies to MEC groups



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