New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002 (90 of 2002)

Schedule 15   Value shifting

Part 2   Amendment of the Income Tax (Transitional Provisions) Act 1997

2   After Part 3-90

Insert:

Part 3-95 - Value shifting

Division 723 - Direct value shifting by creating right over non-depreciating asset

723-1 Application of Division 723

(1) Division 723 applies to a realisation event happening on or after 1 July 2002 to:

(a) a CGT asset; or

(b) an item of trading stock;

(c) a revenue asset.

(2) Paragraph 723-10(1)(b) or 723-15(1)(b) applies to a right created on or after 1 July 2002.

Division 725 - Direct value shifting affecting interests in companies and trusts

725-1 Application of Division 725

Division 725 applies to a scheme entered into on or after 1 July 2002. It also applies to a scheme entered into on or after 27 June 2002, but only if:

(a) the decrease times for down interests of which entities are affected owners are all on or after 1 July 2002; and

(b) the increase times for up interests of which entities are affected owners are all on or after 1 July 2002.

Division 727 - Indirect value shifting affecting interests in companies and trusts, and arising from non-arm's length dealings

727-1 Application of Division 727

(1) Division 727 applies to a scheme entered into on or after 1 July 2002.

(2) It also applies to a scheme entered into on or after 27 June 2002, but only in relation to:

(a) an indirect value shift that happens under the scheme on or after 1 July 2002; or

(b) a presumed indirect value shift that happens under the scheme and affects a realisation event that happens on or after 1 July 2002.

(3) Subsection (2) does not apply to an indirect value shift, or a presumed indirect value shift, if:

(a) the economic benefits taken into account in determining that the scheme has resulted in that indirect value shift or presumed indirect value shift include economic benefits provided by:

(i) an act referred to in Division 138 of the Income Tax Assessment Act 1997 as the trigger event; or

(ii) an event or act referred to in Division 139 of the Income Tax Assessment Act 1997 as the trigger event; and

(b) the act was done, or the event happened, on or after 27 June 2002 and before 1 July 2002.

Note: In that case, the consequences of the trigger event are worked out under Division 138 or 139 of the Income Tax Assessment Act 1997: see items 13 and 14 of Schedule 15 to the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002.