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-F - Consequences of an indirect value shift  

Affected owners

SECTION 727-530   Who are the affected owners  

727-530(1)    
The table sets out the affected owners for the ^* indirect value shift.

Affected owners
Item	In this case:	The affected owners include:
1	At least one condition in section 727-105 (ultimate controller test) is satisfied	each *ultimate controller because of which a condition in that section is satisfied; and each entity that, at a time during the *IVS period when such an ultimate controller *controlled (for value shifting purposes) the losing entity, was an *intermediate controller of the losing entity; and
		each entity that, at a time during the IVS period when such an ultimate controller controlled (for value shifting purposes) the gaining entity, was an intermediate controller of the gaining entity
2	The conditions in section 727-110 (common-ownership nexus test) are satisfied in respect of: (a) one or more times; or (b) one or more sets of 2 times	each *ultimate owner who is one of 2 or more ultimate owners because of whom the condition in the applicable item of that table is satisfied in respect of any of those times; and each entity through which ownership or rights are traced to such an ultimate owner in applying the applicable item of that table in respect of any of those times
3	Any case	the *losing entity and the *gaining entity
4	Any case	each entity that, at any time after the *scheme was entered into, is an *associate of an entity that is an affected owner because of item 1, 2 or 3 of this table
5	Any case	each *active participant in the *scheme

727-530(2)    
An entity is an intermediate controller of another entity if, and only if:

(a) the first entity ^* controls (for value shifting purposes) the other entity; and

(b) the first entity is ^* controlled (for value shifting purposes) by an ^* ultimate controller of the other entity.

Active participants (if both losing and gaining entities are closely held)

727-530(3)    
An entity (the first entity ) is an active participant in the ^* scheme if:

(a) at some time during the ^* IVS period, neither the losing entity nor the gaining entity has 300 or more members (in the case of a company) or 300 or more beneficiaries (in the case of a trust); and

(b) the first entity:

(i) actively participated in, or directly facilitated, the entering into of the ^* scheme; or

(ii) at some time during the ^* IVS period actively participated in, or directly facilitated, the carrying out of the scheme;

(whether or not it did so at the direction of some other entity); and

(c) at some time during the ^* IVS period, the first entity owned:

(i) an ^* equity or loan interest in the losing entity or in the gaining entity; or

(ii) an ^* indirect equity or loan interest in the losing entity or in the gaining entity; and

(d) the first entity is neither the losing entity nor the gaining entity.

Note:

Subsections 727-110(2) and (3) contain rules about when an entity is treated as having or not having 300 or more members or beneficiaries.