Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-95
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VALUE SHIFTING
Division 725
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Direct value shifting affecting interests in companies and trusts
Subdivision 725-A
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Scope of the direct value shifting rules
SECTION 725-65
Cause of the value shift
725-65(1)
It must be the case that one or more of the following:
(a) the target entity;
(b) the controller;
(c) an entity that was an * associate of the controller at some time during or after the * scheme period;
(d) an * active participant in the * scheme;
(e) to which the decrease in the * market value of the * down interests is reasonably attributable; and
(f) to which the increase in the market value of the * up interests, or the issue of up interests at a * discount, is reasonably attributable, or that is or include the issue of up interests at a * discount.
Active participants (if target entity is closely held)
725-65(2)
An entity (the first entity ) is an active participant in the * scheme if, and only if:
(a) at some time during the * scheme period, the target entity has fewer than 300 members (in the case of a company) or fewer than 300 beneficiaries (in the case of a trust); and
(b) the first entity has actively participated in, or directly facilitated, the entering into or carrying out of the * scheme (whether or not it did so at the direction of some other entity); and
(c) the first entity:
When an entity has 300 or more members or beneficiaries
725-65(3)
Section 124-810 (under which certain companies and trusts are not regarded as having 300 or more members or beneficiaries) also applies for the purposes of this Division.
725-65(4)
In addition, this Division applies to a * non-fixed trust as if it did not have 300 or more beneficiaries.
View history note
Hide history noteIt must be the case that one or more of the following:
(a) the target entity;
(b) the controller;
(c) an entity that was an * associate of the controller at some time during or after the * scheme period;
(d) an * active participant in the * scheme;
(either alone or together with one or more other entities) did under the scheme the one or more things:
(e) to which the decrease in the * market value of the * down interests is reasonably attributable; and
(f) to which the increase in the market value of the * up interests, or the issue of up interests at a * discount, is reasonably attributable, or that is or include the issue of up interests at a * discount.
Active participants (if target entity is closely held)
725-65(2)
An entity (the first entity ) is an active participant in the * scheme if, and only if:
(a) at some time during the * scheme period, the target entity has fewer than 300 members (in the case of a company) or fewer than 300 beneficiaries (in the case of a trust); and
(b) the first entity has actively participated in, or directly facilitated, the entering into or carrying out of the * scheme (whether or not it did so at the direction of some other entity); and
(c) the first entity:
(i) owns a * down interest at the * decrease time; or
(ii) owns an * up interest at the * increase time or has an up interest issued to it at a * discount because of the * direct value shift.
When an entity has 300 or more members or beneficiaries
725-65(3)
Section 124-810 (under which certain companies and trusts are not regarded as having 300 or more members or beneficiaries) also applies for the purposes of this Division.
725-65(4)
In addition, this Division applies to a * non-fixed trust as if it did not have 300 or more beneficiaries.