Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 727.905

  (1)   This Subdivision affects how the rest of this Division applies to a * scheme (the IVS scheme ) that is or includes a scheme (the DVS scheme ) under which there is a * direct value shift.

  (2)   If the * direct value shift:

  (a)   has consequences under Division   725 for an entity as an * affected owner of * down interests (or would do so apart from section   725 - 90 (about direct value shifts that will be reversed)); and

  (b)   also has consequences under that Division for another entity as an affected owner of * up interests (or would do so apart from section   725 - 90);

the rest of this Subdivision has effect, for the purposes of Subdivisions   727 - A to 727 - K, in order to determine:

  (c)   whether the IVS scheme results in an * indirect value shift, from the first entity to the other entity, that has consequences under this Division; and

  (d)   whether the IVS scheme has consequences under Subdivision   727 - K because it results in a * presumed indirect value shift affecting a * realisation event happening to * equity or loan interests, or to * indirect equity or loan interests, in the first entity; and

  (e)   those consequences.

Note:   Section   725 - 50 sets out when a direct value shift has consequences under Division   725.

  (3)   If:

  (a)   the IVS scheme is the DVS scheme; and

  (b)   subsection   725 - 145(2) is satisfied for the * direct value shift (because one or more equity or loan interests in the target entity are issued at a discount); but

  (c)   subsection   725 - 145(3) (about an increase in the market value of one or more equity or loan interests in the target entity) is not satisfied for the direct value shift;

Subdivisions   727 - A to 727 - K apply to the IVS scheme only as provided in this section.

  (4)   Otherwise, those Subdivisions apply to the IVS scheme as provided in this section in addition to any other application they have to the scheme.