Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:15_3:p2
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 15 cl 3 (pt 2/10)
Character Range: 357644–360423

interest in losing entity
727‑620 Reduction of gain on realisation event for affected interest in gaining entity
727‑625 Total gain reductions not to exceed total loss reductions
727‑630 How cap in section 727‑625 applies if affected interest is also trading stock or a revenue asset
727‑635 Splitting an equity or loan interest
727‑640 Merging equity or loan interests
727‑645 Effect of CGT roll‑over

Further exclusion for certain 95% services indirect value shifts if realisation time method must be used
727‑700 When 95% services indirect value shift is excluded

95% services indirect value shifts that are not excluded
727‑705 Another provision of the income tax law affects amount related to services by at least $100,000
727‑710 Ongoing or recent service arrangement reduces value of losing entity by at least $100,000
727‑715 Service arrangements reduce value of losing entity that is a group service provider by at least $500,000
727‑720 Abnormal service arrangement reduces value of losing entity that is not a group service provider by at least $500,000
727‑725 Meaning of predominantly‑services indirect value shift
 [This is the end of the Guide.]

Operative provisions

727‑610  Consequences of indirect value shift
 (1) This Subdivision sets out the realisation time method of working out the consequences (if any) of an *indirect value shift.
 (2) If those consequences are to be worked out using that method, this Subdivision applies to each *realisation event:
 (a) by which a loss would, apart from this Division, be *realised for income tax purposes; and
 (b) that happens to an *affected interest in the *losing entity; and
 (c) that is the first realisation event that happens to that interest at or after the *IVS time; and
 (d) that happens:
 (i) if the amount of the indirect value shift is $500,000 or more—at any time after the IVS time; or
 (ii) otherwise—within 4 years after the IVS time.
 (3) If:
 (a) those consequences are to be worked out using that method; and
 (b) the *gaining entity is a company or trust (except one listed in section 727‑125 (about superannuation entities)) immediately before the *IVS time;
this Subdivision applies to each *realisation event:
 (c) by which a gain would, apart from this Division, be *realised for income tax purposes; and
 (d) that happens to an *affected interest in the *gaining entity; and
 (e) that is the first realisation event that happens to that interest at or after the IVS time.
 (4) The consequences for the *affected interest depend on its character. There are consequences for the interest in its character as a *CGT asset. However, if the interest is also *trading stock or a *revenue asset, there are additional consequences for it in that character.
 (5) In working out the consequences