Income Tax Assessment Act 1997
A * scheme can result in one or more * indirect value shifts only if one or more economic benefits have been, are being, or are to be, * provided * in connection with the scheme. 727-150(2)
The question whether the * scheme has that result must be determined by reference to the facts and circumstances that exist at the earliest time (either when the scheme is entered into or later) when it is reasonable to conclude that:
(a) all the economic benefits that have been, are being, or are to be, * provided * in connection with the scheme can be identified; and
(b) for each of those economic benefits:
(i) the entity that has provided, is providing, or is to provide, the economic benefit can be identified; and
(ii) the entity to which the economic benefit has been, is being, or is to be, provided can be identified; and
(iii) if the economic benefit is to be provided - those entities are in existence, and the providing of the economic benefit is not contingent; and
(c) there are no other economic benefits that are to be provided in connection with the scheme if some contingency is met.
That time is called the IVS time for the scheme.
In most cases, the IVS time will be at or soon after the scheme is entered into. However, if:
there may be consequences for those interests similar to those of an indirect value shift resulting from the scheme. See Subdivision 727-K .727-150(3)
The * scheme results in an indirect value shift from one entity (the losing entity ) to another entity (the gaining entity ) if the total *market value of the one or more economic benefits (the greater benefits ) that the losing entity has * provided, is providing, or is to provide, to the gaining entity * in connection with the scheme exceeds:
(a) the total market value of the one or more economic benefits ( lesser benefits ) that the gaining entity has provided, is providing, or is to provide, to the losing entity in connection with the scheme; or
(b) if there are no economic benefits covered by paragraph (a) - nil.
That excess is the amount of the indirect value shift.727-150(4)
The *market value of an economic benefit is to be determined as at the earliest time when it is reasonable to conclude that:
(a) the economic benefit can be identified; and
(b) paragraph (2)(b) is satisfied for that benefit.
For more rules affecting how the market value of an economic benefit is determined, see Subdivision 727-D .727-150(5)
Neither the * losing entity nor the * gaining entity needs to be a party to the * scheme. A benefit can be provided by act or omission. 727-150(6)
The indirect value shift happens at the * IVS time. 727-150(7)
The IVS period for a * scheme starts immediately before the scheme is entered into and ends at the * IVS time. 727-150(8)
A contingency that is artificial, or is virtually certain to be met, is treated under this Division as if it had been met.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.