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-H - The adjustable value method  

Reductions of adjustable value

SECTION 727-780   Working out the reduction on a loss-focussed basis  

727-780(1)    
Use the table in subsection (2) of this section to work out on a loss-focussed basis the amount (if any) by which the interest ' s ^* adjustable value is reduced.

727-780(2)    

This involves comparing the old ^* market value, and the notional resulting market value, with the interest ' s ^* adjustable value (the old adjustable value ) immediately before the ^* IVS time.

Reduction under the attributable decrease method
Item	If the old market value:	And the notional resulting market value:	This is the result:
1	is greater than or equal to the old adjustable value	is less than the old adjustable value	the *adjustable value is reduced to the notional resulting market value
2	is greater than or equal to the old adjustable value	is greater than or equal to the old adjustable value	the *adjustable value is not reduced because of the *indirect value shift
3	is less than the old adjustable value	is less than the old adjustable value	the *adjustable value is reduced by the amount of the *disaggregated attributable decrease

Note 1:

Because of item 1, the indirect value shift cannot cause a loss to arise on disposal of the interest.

Note 2:

Because of item 3 the loss already embedded in the interest is preserved, but the indirect value shift does not increase it.