Document ID: chunk:federal_register_of_legislation:C2025C00029:section:115:p33
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 115 (pt 33/40)
Character Range: 6587159–6589730

likely than not that, because of the *scheme, that state of affairs will cease to exist within 4 years after that time.
Example: Under a scheme, the voting rights attached to a class of shares in a company are changed. As a result, the market value of shares in that class decreases, and the market value of other classes of shares in the company increases. The company's constitution provides that the change is to last for only 3 years.
 (2) However, this section stops applying if the state of affairs referred to in paragraph (1)(a) still exists:
 (a) at the end of those 4 years; or
 (b) when a *realisation event happens to *down interests or *up interests of which you are, or any other entity is, an *affected owner;
whichever happens sooner.
 (3) If this section stops applying, it is taken never to have applied to the *direct value shift.
Note: This may result in an assessment for an earlier income year having to be amended to give effect to the consequences that the direct value shift would have had for you under this Division if this section hadn't applied.

725‑95  Direct value shift resulting from reversal
 (1) A *direct value shift does not have consequences for any entity under this Division if:
 (a) section 725‑90 applies, and the state of affairs referred to in paragraph 725‑90(1)(a) ceases to exist; and
 (b) the direct value shift would not have happened but for that state of affairs ceasing to exist.
 (2) However, if section 725‑90 stops applying, this section is taken never to have applied to the later direct value shift.

Subdivision 725‑B—What is a direct value shift

Table of sections
725‑145 When there is a direct value shift
725‑150 Issue of equity or loan interests at a discount
725‑155 Meaning of down interests, decrease time, up interests and increase time
725‑160 What is the nature of a direct value shift?
725‑165 If market value decrease or increase is only partly attributable to the scheme

725‑145  When there is a direct value shift
 (1) There is a direct value shift under a *scheme involving *equity or loan interests in an entity (the target entity) if:
 (a) there is a decrease in the *market value of one or more equity or loan interests in the target entity; and
 (b) the decrease is reasonably attributable to one or more things done under the scheme, and occurs at or after the time when that thing, or the first of those things, is done; and
 (c) either or both of subsections (2) and (3) are satisfied.
Examples of something done under a scheme are issuing new shares at a *discount, buying back shares or