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-C - Exclusions  

General

SECTION 727-220   Disposal of asset at cost, or at undervalue if full value is not reflected in adjustable values of equity or loan interests in the losing entity  

727-220(1)    
An ^* indirect value shift does not have consequences under this Division if the conditions in this section are met.

727-220(2)    
The ^* greater benefits must consist entirely of:

(a) the ^* losing entity transferring a ^* CGT asset to the ^* gaining entity; or

(b) a right to have the losing entity transfer an asset to the gaining entity.

727-220(3)    

There must be ^* lesser benefits and, as at the ^* IVS time, the total *market value of the lesser benefits must not be less than the greatest of these amounts:

(a) the asset ' s ^* cost base at that time;

(b) the asset ' s cost;

(c) the asset ' s market value immediately before the most recent time (if any), since the ^* losing entity ^* acquired the asset, when an ^* affected owner has acquired:

(i) a ^* primary equity interest in the losing entity; or

(ii) an ^* indirect primary equity interest in the losing entity.

727-220(4)    
A ^* primary equity interest in an entity is an indirect primary equity interest in another entity if, and only if:

(a) the first entity owns a primary equity interest in the other entity; or

(b) the first entity owns a primary equity interest that is an indirect primary equity interest in the other entity because of one or more other applications of this subsection.