Document ID: chunk:federal_register_of_legislation:C2024C00267:section:4:p5
Version: federal_register_of_legislation:C2024C00267
Segment Type: section
Provision Reference: s 4 (pt 5/64)
Character Range: 716361–718954

indirect value shifts relating mainly to services
727‑470 Affected interests do not include equity or loan interests owned by entity that is eligible to be an STS taxpayer

727‑1  Application of Division 727
 (1) Division 727, as inserted by the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002 and amended by the New Business Tax System (Consolidation and Other Measures) Act 2003, applies to a scheme entered into on or after 1 July 2002.
 (2) It also applies to a scheme entered into on or after 27 June 2002, but only in relation to:
 (a) an indirect value shift that happens under the scheme on or after 1 July 2002; or
 (b) a presumed indirect value shift that happens under the scheme and affects a realisation event that happens on or after 1 July 2002.
 (3) Subsection (2) does not apply to an indirect value shift, or a presumed indirect value shift, if:
 (a) the economic benefits taken into account in determining that the scheme has resulted in that indirect value shift or presumed indirect value shift include economic benefits provided by:
 (i) an act referred to in Division 138 of the Income Tax Assessment Act 1997 as the trigger event; or
 (ii) an event or act referred to in Division 139 of the Income Tax Assessment Act 1997 as the trigger event; and
 (b) the act was done, or the event happened, on or after 27 June 2002 and before 1 July 2002.
Note: In that case, the consequences of the trigger event are worked out under Division 138 or 139 of the Income Tax Assessment Act 1997: see items 13 and 14 of Schedule 15 to the New Business Tax System (Consolidation, Value Shifting, Demergers and Other Measures) Act 2002.

727‑230  Transitional exclusion for certain indirect value shifts relating mainly to services
 (1) An indirect value shift does not have consequences under Division 727 of the Income Tax Assessment Act 1997 if, to the extent of at least 95% of their total market value, the greater benefits consist entirely of:
 (a) a right to have services that are covered by section 727‑240 of that Act provided directly by the losing entity to the gaining entity; or
 (b) services that are covered by that section and have been, are being, or are to be, so provided;
or both, and the IVS time for the scheme that results in the indirect value shift is before:
 (c) unless paragraph (d) applies—the start of the losing entity's 2003‑2004 income year; or
 (d) if the losing entity's 2002‑2003 income year ends before 30 June 2003—the start of the losing entity's 2004‑2005 income year.

How subsection (1) applies to