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Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-95 - VALUE SHIFTING  

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Division 725 - Direct value shifting affecting interests in companies and trusts  

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Subdivision 725-F - Value adjustments and taxed gains  

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SECTION 725-380  

725-380   Decreases in adjustable value of down interests (with pre-shift losses)  

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Use the following method statement to work out the decrease in * adjustable value of a * down interest under:


(a) item 5 or 7 of the table in subsection 725-250(2) ; or


(b) item 3, 5 or 8 of the table in subsection 725-335(3) . Method statement


Step 1.

Group together all * down interests of the kind referred to in the relevant item that:

  • (a) immediately before the * decrease time, had the same * adjustable value as the down interest; and
  • (b) immediately before that time had the same *market value as the down interest; and
  • (c) sustained the same decrease in market value as the down interest because of the * direct value shift.


    • Step 2.

    Work out the value shifted from that group of * down interests to the * up interests referred to in the relevant item using the formula:


      Sum of the decreases in *market
    value of all *down interests in
    the group because of the *direct
    value shift    		 × Sum of the increases in *market value
    of, and *discounts on the issue of,
    those *up interests because of the
                                    *direct value shift                                
    Sum of the increases in *market value
    of, and *discounts given on the issue
    of, all *up interests because of the
    *direct value shift    		  


    Step 3.

    The decrease in * adjustable value of the * down interest under the relevant item is equal to:


                                          Value shifted                                    
    Number of *down interests in the
    group    		  

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