Income Tax Assessment Act 1997



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

Subdivision 725-A - Scope of the direct value shifting rules  

SECTION 725-65   Cause of the value shift  

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;

(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)

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

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.

In addition, this Division applies to a * non-fixed trust as if it did not have 300 or more beneficiaries.


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