Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-95 - VALUE SHIFTING  

Division 725 - Direct value shifting affecting interests in companies and trusts  

Subdivision 725-C - Consequences of a direct value shift  

Special cases

SECTION 725-230   Off-market buy-backs  

725-230(1)    
The consequences are different if:

(a) a decrease in the *market value of a ^* down interest of which you are an ^* affected owner is reasonably attributable to the target entity proposing to buy back that interest for less than its market value; and

(b) the target entity does buy back that down interest; and

(c) subsection 159GZZZQ(2) of the Income Tax Assessment Act 1936 treats you as having received the down interest ' s market value worked out as if the buy-back had not occurred and was never proposed to occur.

725-230(2)    
The ^* adjustable value of the ^* down interest is not reduced, and there is no ^* taxing event generating a gain.

Note:

The down interest is not dealt with here because it is already dealt with in Division 16K of Part III of the Income Tax Assessment Act 1936 .

725-230(3)    
Also, to the extent that the ^* direct value shift is from the ^* down interest to ^* up interests of which you are an ^* affected owner, uplifts in the ^* adjustable value of the up interests are worked out under either or both of:

(a) item 8 of the table in subsection 725-250(2) ; and

(b) item 9 of the table in subsection 725-335(3) ;

as if the down interest were one owned by another affected owner.