Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-95 - VALUE SHIFTING  

Division 727 - Indirect value shifting affecting interests in companies and trusts, and arising from non-arm ' s length dealings  

Subdivision 727-K - Reduction of loss on equity or loan interests realised before the IVS time  

SECTION 727-865   How other provisions of this Division apply to support this Subdivision  

727-865(1)    
To avoid doubt, these provisions apply for the purposes of working out whether there has been a ^* presumed indirect value shift and, if so, the amount of it:

(a) sections 727-155 , 727-160 and 727-165 (about economic benefits);

(b) section 727-315 (Transfer, for its adjustable value, of depreciating asset acquired for less than $1,500,000).

727-865(2)    
For the purposes of section 727-850 , these provisions:

(a) Subdivision 727-C (Exclusions), except section 727-260 (about a shift down a wholly-owned chain of entities);

(b) sections 727-700 to 727-725 (about 95% services indirect value shifts), except subsection 727-700(1) ;

apply to the ^* presumed indirect value shift on the assumptions set out in subsection (3).

727-865(3)    
The assumptions are:

(a) the ^* presumed indirect value shift is an ^* indirect value shift resulting from the ^* scheme; and

(b) the ^* prospective losing entity for the scheme is the ^* losing entity for that indirect value shift; and

(c) each ^* prospective gaining entity for the scheme is the ^* gaining entity for that indirect value shift; and

(d) the ^* greater benefits under the presumed indirect value shift are the greater benefits under that indirect value shift; and

(e) the ^* lesser benefits (if any) under the presumed indirect value shift are the lesser benefits under that indirect value shift; and

(f) the time of the realisation event mentioned in paragraph 727-850(1)(c) is the ^* IVS time for the scheme; and

(g) the ^* IVS period for the scheme ends at the time of the realisation event; and

(h) section 727-105 (Ultimate controller test) is satisfied for that indirect value shift according to what it is reasonable to conclude under subsection 727-860(2) as applying to the presumed indirect value shift; and

(i) section 727-110 (Common-ownership nexus test) is satisfied for that indirect value shift according to what it is reasonable to conclude under subsection 727-860(2) as applying to the presumed indirect value shift; and

(j) a reference to the realisation event mentioned in subsection 727-700(1) were a reference to the realisation event mentioned in paragraph 727-850(1)(c) ; and

(k) the interest to which the realisation event mentioned in paragraph 727-850(1)(c) happens were the interest referred to in paragraph 727-700(1)(a) ; and

(l) a reference in any of sections 727-700 to 727-725 (about 95% services indirect value shifts), except subsection 727-700(1) , to the owner were a reference to the entity that, at the time of the realisation event mentioned in paragraph 727-850(1)(c) , owns the interest to which the event happens.

727-865(4)    
Sections 727-635 and 727-640 affect how this Subdivision applies to ^* equity or loan interests, and ^* indirect equity or loan interests, in the ^* prospective losing entity that are split or merged during the period:

(a) starting when the ^* scheme is entered into; and

(b) ending at the time of the ^* realisation event mentioned in paragraph 727-850(1)(c) ;

in the same way as those sections affect how Subdivision 727-G would apply to those interests on the assumptions set out in subsection (3) of this section.

727-865(5)    
The application of a provision because of this section is additional to, and is not intended to limit, any other application of the provision.