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  

Anti-overlap provisions

SECTION 727-250   Distribution by an entity to a member or beneficiary  

727-250(1)    
An ^* indirect value shift does not have consequences under this Division if:

(a)    the ^* greater benefits consist entirely of:

(i) a distribution of income or capital that the ^* losing entity makes to the ^* gaining entity; or

(ii) a right to a distribution of income or capital that the losing entity is to make to the gaining entity;

because the gaining entity holds ^* primary equity interests in the losing entity; and

(b)    either:

(i) an amount covered by one or more of subsections (2) , (3) and (4) ; or

(ii) the total of 2 or more such amounts;

equals or exceeds the amount of the distribution.

Conditions

727-250(2)    

This subsection covers an amount that the assessable income, *exempt income or *non-assessable non-exempt income of the gaining entity for any income year includes because of the distribution or right.

727-250(3)    
This subsection covers an amount by which the ^* cost base or ^* reduced cost base (or both) of some or all of the ^* primary equity interests referred to in subsection (1) changes because of the distribution or right.

727-250(4)    
This subsection covers an amount that, because of the distribution or right, is taken into account:

(a)    under section 116-20 in working out the ^* capital proceeds of a ^* CGT event that happens during any income year to some or all of the ^* primary equity interests referred to in subsection (1) ; or

(b)    in working out a ^* capital gain that an entity makes from CGT event E4 or G1 happening during any income year to some or all of those primary equity interests; or

(c)    in working out whether a loss or gain is ^* realised for income tax purposes by a ^* realisation event that happens to some or all of those primary equity interests (in their character as ^* trading stock or ^* revenue assets).

Application of section to deemed dividend

727-250(5)    
If a ^* corporate tax entity makes a ^* distribution that is not otherwise a distribution of income or capital, this section applies as if the distribution were a distribution of income or capital the entity made.

Note:

Subsection (5) extends this section to cover something that is taken to be a dividend paid by a company. Compare item 1 of the table in subsection 960-120(1) .