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 727-860   Conditions about the prospective gaining entity  

727-860(1)    
By the deadline set out in subsection (5), the conditions in subsections (2) and (3) must be satisfied for at least one of these entities:

(a) the entity or entities referred to in paragraph 727-855(1)(a) ;

(b) if at the time of the ^* realisation event it is reasonable to conclude that the entity, or at least one of the entities, referred to in paragraph 727-855(1)(a) will be one of 2 or more entities, but it cannot be determined which - those 2 or more entities.

727-860(2)    
Enough must be known about the identity of an entity covered by subsection (1) for it to be reasonable to conclude that, if:

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

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

(c) that entity were the ^* gaining entity for the indirect value shift;

(d) the ^* prospective losing entity were the ^* losing entity for the indirect value shift; and

either or both of these would be satisfied for the indirect value shift:

(e) section 727-105 (Ultimate controller test); and

(f) section 727-110 (Common-ownership nexus test).

727-860(3)    
Enough must be known about the identity of the entity referred to in subsection (2) for it also to be reasonable to conclude that, in relation to either or both of the following:

(a) the ^* prospective losing entity ^* providing one or more economic benefits to that entity ^* in connection with the ^* scheme; or

(b) that entity providing one or more economic benefits to the prospective losing entity in connection with the scheme;

that entity and the prospective losing entity were not, are not, will not be, or would not be, dealing with each other at ^* arm ' s length.

727-860(4)    
Each entity that is covered by subsection (1), and for which subsections (2) and (3) are satisfied, is called a prospective gaining entity for the ^* scheme.

727-860(5)    
The deadline is:

(a) if the entity that owned the ^* equity or loan interest immediately before the ^* realisation event must lodge an ^* income tax return for the income year in which the event happens - the time by which the return must be lodged; or

(b) otherwise - the end of the 6 months immediately after that income year.