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  

95% services indirect value shifts that are not excluded

SECTION 727-705   727-705   Another provision of the income tax law affects amount related to services by at least $100,000  


The conditions in this section are met if:


(a) the * losing entity or the * gaining entity lodges an * income tax return for an income year during some or all of which the owner owned the interest; and


(b) a provision of this Act:


(i) reduces or excludes an amount that is included in the return; or

(ii) increases an amount that is so included; or

(iii) includes an amount not included in the return;
for the purposes of working out the taxable income, a * tax loss, or a * net capital loss, of that entity for that income year; and


(c) the amount is related to the right mentioned in paragraph 727-700(2)(a) , or to some or all of the services mentioned in paragraph 727-700(2)(a) or (b), from the point of view of the losing entity providing the services or of the gaining entity receiving them; and


(d) if the amount is so reduced or increased - the reduction or increase is at least $100,000; and


(e) if the amount is so excluded or included - the amount is at least $100,000; and


(f) at some time after the return is lodged, the entity that lodged it is aware, or ought reasonably to be aware, of the reduction, exclusion, increase or inclusion.

Example:

If the Commissioner has notified an entity affected by a determination under Part IVA of the Income Tax Assessment Act 1936 , the entity ought reasonably to be aware of the effect of the determination.


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