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-E - Key concepts  

Common-ownership nexus and ultimate stake of a particular percentage

SECTION 727-415   Rules for tracing  

727-415(1)    
In applying sections 727-400 , 727-405 and 727-410 , follow the rules in this section.

Interposed entities

727-415(2)    
Tracing is to be done through any interposed entities.

Ownership or rights held jointly

727-415(3)    
If some of the ownership or rights of a particular kind in relation to a company or trust are held by 2 or more entities jointly or in common, each of the entities is treated as holding a proportion of the ownership or rights so held. The proportion is to be worked out on a reasonable basis, so that the total of the proportions equals the total of the ownership or rights so held.

Ownership or rights held by associate

727-415(4)    
If, at a particular time:

(a) an ^* ultimate owner is an ^* associate of another ultimate owner; and

(b) the associate ultimately holds some of the ownership or rights of a particular kind in relation to a company or trust;

then, in determining whether the other ultimate owner is one of 2 or more ultimate owners because of whom the conditions in an item in the table in section 727-400 are satisfied, the ownership or rights of that kind in relation to the company or trust held by the associate at that time:

(c) to the extent of a particular percentage, may be treated as being instead held by the other ultimate owner; and

(d) to the extent so treated, cannot be treated as being instead held by any other ultimate owner of whom the first ultimate owner is an associate.

727-415(5)    
If one or more applications of subsection (4) are necessary to establish that an ^* ultimate owner is one of 2 or more ultimate owners because of whom the conditions in an item in the table in section 727-400 are satisfied, that subsection must be applied accordingly.