Document ID: chunk:federal_register_of_legislation:C2025C00029:section:115:p29
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 115 (pt 29/40)
Character Range: 6577627–6580357

owned it; and
 (b) the other entity *acquired the underlying asset as a result of that CGT event; and
 (c) there was a *replacement‑asset roll‑over for the CGT event; and
 (d) the transferor received the CGT asset (or CGT assets including it) in respect of the CGT event as the replacement asset (or the replacement assets).
 (2) For an entity (the transferor) that owns a *CGT asset, the CGT asset is an indirect roll‑over replacement for something (the underlying asset) that another entity owns if, and only if:
 (a) a *CGT event happened to another CGT asset at a time when the transferor owned it and the other entity already owned the underlying asset; and
 (b) for the transferor, the other CGT asset was at that time:
 (i) a *direct roll‑over replacement for the underlying asset; or
 (ii) an indirect roll‑over replacement for the underlying asset because of any other application or applications of this subsection; and
 (c) there was a *replacement‑asset roll‑over for the CGT event; and
 (d) the transferor received the first CGT asset (or CGT assets including it) in respect of the CGT event as the replacement asset (or the replacement assets).

Division 725—Direct value shifting affecting interests in companies and trusts

Table of Subdivisions
 Guide to Division 725
725‑A Scope of the direct value shifting rules
725‑B What is a direct value shift
725‑C Consequences of a direct value shift
725‑D Consequences for down interest or up interest as CGT asset
725‑E Consequences for down interest or up interest as trading stock or a revenue asset
725‑F Value adjustments and taxed gains

Guide to Division 725

725‑1  What this Division is about
      If, under a scheme, value is shifted from equity or loan interests in a company or trust to other equity or loan interests in the same company or trust (including interests issued at a discount), this Division:

                (a) adjusts the value of those interests for income tax purposes to take account of material changes in market value that are attributable to the value shift; and
                (b) treats the value shift as a partial realisation to the extent that value is shifted between interests held by different owners, and in some other cases.
      However, it does so only for interests that are owned by entities involved in the value shift.

Subdivision 725‑A—Scope of the direct value shifting rules

Table of sections
725‑45 Main object
725‑50 When a direct value shift has consequences under this Division
725‑55 Controlling entity test
725‑65 Cause of the value shift
725‑70 Consequences for down interest only if there is a material decrease in its market value
725‑80 Who is an affected owner of a down interest?
725‑85 Who is an