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-H - The adjustable value method  

Reductions of adjustable value

SECTION 727-770   Reduction under the adjustable value method  

727-770(1)    
This section sets out how to work out the amount (if any) by which the ^* adjustable value of an ^* affected interest in the ^* losing entity is reduced.

727-770(2)    

First, work out under section 727-775 whether the ^* indirect value shift has produced for the owner of the interest a ^* disaggregated attributable decrease in the *market value of the interest.

727-770(3)    
If it has not, the interest ' s ^* adjustable value is not reduced because of the ^* indirect value shift.

727-770(4)    
If it has, the amount (if any) by which the interest ' s ^* adjustable value is reduced is worked out on a ^* loss-focussed basis under section 727-780 .

727-770(5)    
However, if a choice is made in accordance with section 727-550 for the reduction not to be worked out on a ^* loss-focussed basis, the reduction is equal to the ^* disaggregated attributable decrease.

Reduction not to exceed reasonable amount

727-770(6)    
If the reduction worked out as provided in subsection (4) or (5) is not reasonable in the circumstances, having regard to the objects of this Division, the interest ' s ^* adjustable value is instead reduced by so much of that reduction as is reasonable in the circumstances, having regard to those objects.

Note:

The main object of this Division is set out in section 727-95.