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-H - The adjustable value method  

Reductions of adjustable value

SECTION 727-780   Working out the reduction on a loss-focussed basis  

727-780(1)  
Use the table in subsection (2) of this section to work out on a loss-focussed basis the amount (if any) by which the interest ' s * adjustable value is reduced.

727-780(2)  


This involves comparing the old * market value, and the notional resulting market value, with the interest ' s * adjustable value (the old adjustable value ) immediately before the * IVS time.


Reduction under the attributable decrease method
Item If the old market value: And the notional resulting market value: This is the result:
1 is greater than or equal to the old adjustable value is less than the old adjustable value the *adjustable value is reduced to the notional resulting market value
2 is greater than or equal to the old adjustable value is greater than or equal to the old adjustable value the *adjustable value is not reduced because of the *indirect value shift
3 is less than the old adjustable value is less than the old adjustable value the *adjustable value is reduced by the amount of the *disaggregated attributable decrease

Note 1:

Because of item 1, the indirect value shift cannot cause a loss to arise on disposal of the interest.

Note 2:

Because of item 3 the loss already embedded in the interest is preserved, but the indirect value shift does not increase it.


 

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