Income Tax Assessment Act 1997



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 727-775   Has there been a disaggregated attributable decrease?  


This section sets out how to determine whether an * indirect value shift has produced, for the owner of an * equity or loan interest, a disaggregated attributable decrease in the *market value of the interest and, if so, the amount of it.


Work out the *market value of the interest at the * IVS time, but disregarding:

(a) all effects on the market value of the interest during the * IVS period, except effects that are reasonably attributable to the * indirect value shift; and

(b) the effects (if any) of the indirect value shift on the market value of * equity or loan interests, or * indirect equity or loan interests, in the gaining entity.

(This result is called the notional resulting market value .)


Paragraph (2)(b) is necessary because the market value of the interest may also have been affected by the increase in the market value of interests in the gaining entity, because the entity in which the interest is held had direct or indirect interests in both the losing entity and the gaining entity.

In such a case, the reduction in adjustable value under this Division will usually be offset by an uplift under this Division.


If the notional resulting *market value is less than the market value (the old market value ) of the interest:

(a) at the start of the * IVS period; or

(b) if the owner last began to own the interest during that period - when the owner last began to own the interest;

the difference is the disaggregated attributable decrease .


The * indirect value shift has not produced a disaggregated attributable decrease for the owner of the interest if the notional resulting *market value is greater than or equal to the old market value.


The *market value of the interest at a particular time may be worked out under subsection (2) or (3) by making a reasonable estimate of that market value.

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