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-D - Working out the market value of economic benefits  

SECTION 727-315   Transfer, for its adjustable value, of depreciating asset acquired for less than $1,500,000  

727-315(1)    

This Division applies to an economic benefit consisting of:

(a) an entity transferring to another entity a ^* depreciating asset (except a building or structure) for which the transferring entity has deducted or can deduct an amount under Division 40 ; or

(b) a right to have an entity transfer such a depreciating asset to another entity;

as if the economic benefit ' s *market value were equal to the greater (the residual value ) of:

(c) the asset ' s ^* adjustable value at the time when the economic benefit was or is ^* provided; and

(d) the value assigned to the asset at that time in the transferring entity ' s books;

but only if:

(e) as at that time, the ^* cost of the unit to the transferring entity is less than $1,500,000; and

(f) it is reasonable for the transferring entity to conclude that the unit ' s actual market value at that time was, is, or will be, not less than 80%, and not more than 120%, of the residual value; and

(g) both the transferring entity and the other entity choose to have the market value of that economic benefit treated as being equal to the residual value.

727-315(2)    
If:

(a) each of 2 or more economic benefits of the kind mentioned in subsection (1) has been, is being, is to be, or might be, provided by the same transferring entity, to the same other entity, ^* in connection with the same ^* scheme; and

(b) it is reasonable for the transferring entity to conclude that the total of the ^* depreciating assets ' actual *market values at the respective times when the economic benefits were or are ^* provided was, is, or will be, not less than 80%, and not more than 120%, of the total of their respective residual values under subsection (1);

paragraph (1)(f) is taken to be satisfied for each of the economic benefits.