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-A - Scope of the indirect value shifting rules  

SECTION 727-100   727-100   When an indirect value shift has consequences under this Division  


An * indirect value shift (see Subdivision 727-B ) has consequences under this Division if, and only if:


(a) the * losing entity is at the time of the indirect value shift a company or trust (except one listed in section 727-125 (about superannuation entities)); and


(b) in relation to either or both of the following:


(i) the losing entity * providing one or more economic benefits to the gaining entity * in connection with the * scheme from which the indirect value shift results;

(ii) the gaining entity providing one or more economic benefits to the losing entity in connection with the scheme;
the 2 entities are not dealing with each other at * arm ' s length; and


(c) either or both of sections 727-105 and 727-110 are satisfied; and


(d) no exclusion in Subdivision 727-C applies.

Note 1:

The consequences for direct and indirect interests in the losing entity or in the gaining entity are set out in Subdivision 727-F . If those consequences are to be worked out using the realisation time method (under Subdivision 727-G ), there are further exclusions for certain 95% services indirect value shifts: see section 727-700 .

Note 2:

An indirect value shift does not have consequences for interests in the losing entity or gaining entity owned immediately before the IVS time by an entity that:

  • · is a small business entity for each income year that includes any of the IVS period; or
  • · would satisfy the maximum net asset value test in section 152-15 throughout the IVS period.
  • See subsection 727-470(2) .


    View surrounding sectionsView surrounding sectionsBack to top


    This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.