Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:15_1:p8
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 15 cl 1 (pt 8/18)
Character Range: 236532–239199

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 affected owner of an up interest?
725‑90 Direct value shift that will be reversed
725‑95 Direct value shift resulting from reversal

725‑45  Main object
 (1) The main object of this Division is:
 (a) to prevent inappropriate losses from arising on the realisation of *equity or loan interests from which value has been shifted to other equity or loan interests in the same entity; and
 (b) to prevent inappropriate gains from arising on the realisation of equity or loan interests in the same entity to which the value has been shifted;
so far as those interests are owned by entities involved in the value shift.
 (2) This is done by:
 (a) adjusting the value of those interests for income tax purposes to take account of changes in market value that are attributable to the value shift; and
 (b) treating the value shift as a partial realisation to the extent that value is shifted:
 (i) between interests held by different owners; or
 (ii) in the case of interests in their character as CGT assets—from post‑CGT assets to pre‑CGT assets; or
 (iii) between interests of different characters.

725‑50  When a direct value shift has consequences under this Division
  A *direct value shift under a *scheme involving *equity or loan interests in an entity (the target entity) has consequences for you under this Division if, and only if:
 (a) the target entity is a company or trust at some time during the *scheme period; and
 (b) section 725‑55 (Controlling entity test) is satisfied; and
 (c) section 725‑65 (Cause of the value shift) is satisfied; and
 (d) you are an *affected owner of a *down interest, or an *affected owner of an *up interest, or both; and
 (e) neither of sections 725‑90 and 725‑95 (about direct value shifts that are reversed) applies.
Note: For a down interest of which you are an affected owner, the direct value shift has consequences under this Division only if section 725‑70 (about material decrease in market value) is satisfied.

725‑55  Controlling entity test
  An entity (the controller) must *control (for value shifting purposes) the target entity at some time during the period starting when the *scheme is entered into and ending when it has been carried out. (That period is the scheme period.)
For the concept of control (for value shifting purposes),
see sections 727‑355 to 727‑375.
[The next section is section 725‑65.]

725‑65  Cause of the value shift
 (1) It must be the case that one or more of the following:
 (a) the target entity;
 (b) the controller;