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-G - The realisation time method  

Operative provisions

SECTION 727-625   Total gain reductions not to exceed total loss reductions  

727-625(1)    
This section ensures that the total ( total gain reductions ) of the amounts by which section 727-620 reduces gains ^* realised for income tax purposes by ^* realisation events happening at the same time does not exceed the total ( total loss reductions ) of:

(a) the amounts by which section 727-615 reduces losses that:

(i) would, apart from this Division, be ^* realised for income tax purposes by ^* realisation events happening before or at that time; and

(ii) have not already been taken into account in a previous application of this section; and

(b) the amounts by which section 727-850 (as applying to the ^* scheme from which the ^* indirect value shift results) reduces losses that:

(i) would, apart from this Division, be realised for income tax purposes by realisation events happening before the ^* IVS time to ^* equity or loan interests, or ^* indirect equity or loan interests, in the ^* losing entity; and

(ii) have not already been taken into account in a previous application of this section.

727-625(2)    
If, apart from this section, the total gain reductions would exceed the total loss reductions, the amount by which section 727-620 reduces each of the gains is itself reduced by the amount worked out using this formula:

(Total gain reductions − Total loss reductions) Number of interests

727-625(3)    
For the purposes of the formula:

number of interests
means the number of ^* affected interests in the ^* gaining entity to which ^* realisation events happened at that time.