Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies if all of the * members of a * MEC group (the acquired group ) become members of another MEC group, or of a * consolidated group, at a particular time (the acquisition time ) as a result of the * acquisition of * membership interests in:
(a) the * head company of the acquired group; and
(b) other entities that were * eligible tier - 1 companies of the acquired group just before the acquisition time.
(2) Subsections 705 - 175(1) and 705 - 185(1) have effect as if a * membership interest in an entity mentioned in paragraph (1)(b) of this section were a membership interest in the * head company of the acquired group.
Note 1: If the acquiring group is a MEC group, and the head company of the acquired group becomes an eligible tier - 1 company of the acquiring group, the assets of the members of the acquired group do not have their tax cost reset at the acquisition time. This is because:
(a) section 719 - 160 treats an entity becoming an eligible tier - 1 company of the acquiring group as if it were a part of the head company of that group; and
(b) section 705 - 185 treats the subsidiary members of the acquired group as part of the head company of the acquired group.
Note 2: If:
(a) the acquiring group is a MEC group, but the head company of the acquired group does not become an eligible tier - 1 company of the acquiring group; or
(b) the acquiring group is a consolidated group and the acquired group is a MEC group;
the assets of the members of the acquired group have their tax cost reset at the acquisition time (section 719 - 160 does not preclude tax cost resetting in these cases). For the purposes of resetting the tax cost of those assets, section 705 - 185 treats the subsidiary members of the acquired group as part of the head company of the acquired group.