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-L - Indirect value shift resulting from a direct value shift  

SECTION 727-905   How this Subdivision affects the rest of this Division  

727-905(1)    
This Subdivision affects how the rest of this Division applies to a ^* scheme (the IVS scheme ) that is or includes a scheme (the DVS scheme ) under which there is a ^* direct value shift.

727-905(2)    
If the ^* direct value shift:

(a) has consequences under Division 725 for an entity as an ^* affected owner of ^* down interests (or would do so apart from section 725-90 (about direct value shifts that will be reversed)); and

(b) also has consequences under that Division for another entity as an affected owner of ^* up interests (or would do so apart from section 725-90 );

the rest of this Subdivision has effect, for the purposes of Subdivisions 727-A to 727-K, in order to determine:

(c) whether the IVS scheme results in an ^* indirect value shift, from the first entity to the other entity, that has consequences under this Division; and

(d) whether the IVS scheme has consequences under Subdivision 727-K because it results in a ^* presumed indirect value shift affecting a ^* realisation event happening to ^* equity or loan interests, or to ^* indirect equity or loan interests, in the first entity; and

(e) those consequences.

Note:

Section 725-50 sets out when a direct value shift has consequences under Division 725 .

727-905(3)    
If:

(a) the IVS scheme is the DVS scheme; and

(b) subsection 725-145(2) is satisfied for the ^* direct value shift (because one or more equity or loan interests in the target entity are issued at a discount); but

(c) subsection 725-145(3) (about an increase in the market value of one or more equity or loan interests in the target entity) is not satisfied for the direct value shift;

Subdivisions 727-A to 727-K apply to the IVS scheme only as provided in this section.

727-905(4)    
Otherwise, those Subdivisions apply to the IVS scheme as provided in this section in addition to any other application they have to the scheme.