Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:15_3:p4
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 15 cl 3 (pt 4/10)
Character Range: 362584–365267

reflects the effect of the indirect value shift on the market value of *equity or loan interests in the gaining entity.

727‑625  Total gain reductions not to exceed total loss reductions
 (1) This section ensures that the total (total gain reductions) of the amounts by which section 727‑620 reduces gains *realised for income tax purposes by *realisation events happening at the same time does not exceed the total (total loss reductions) of:
 (a) the amounts by which section 727‑615 reduces losses that:
 (i) would, apart from this Division, be *realised for income tax purposes by *realisation events happening before or at that time; and
 (ii) have not already been taken into account in a previous application of this section; and
 (b) the amounts by which section 727‑850 (as applying to the *scheme from which the *indirect value shift results) reduces losses that:
 (i) would, apart from this Division, be realised for income tax purposes by realisation events happening before the *IVS time to *equity or loan interests, or *indirect equity or loan interests, in the *losing entity; and
 (ii) have not already been taken into account in a previous application of this section.
 (2) If, apart from this section, the total gain reductions would exceed the total loss reductions, the amount by which section 727‑620 reduces each of the gains is itself reduced by the amount worked out using this formula:

 (3) For the purposes of the formula:
number of interests means the number of *affected interests in the *gaining entity to which *realisation events happened at that time.

727‑630  How cap in section 727‑625 applies if affected interest is also trading stock or a revenue asset
 (1) This section affects how to work out the total gain reductions and the total loss reductions for the purposes of section 727‑625 if:
 (a) a *realisation event covered by that section happens to an *equity or loan interest, or to an *indirect equity or loan interest, in the *losing entity or in the *gaining entity; and
 (b) the interest is also *trading stock or a *revenue asset at the time of the event.

Trading stock
 (2) In the case of an *equity or loan interest, or an *indirect equity or loan interest, in the *losing entity that is *trading stock at that time:
 (a) the amount (if any) by which section 727‑615 or 727‑850 reduces a loss worked out under section 977‑25 or 977‑30 (about realisation events for trading stock) that would, apart from this Division, be *realised for income tax purposes by the event is taken into account; and
 (b) the amount (if any) by which section 727‑615 or 727‑850 reduces a loss worked out under section 977‑10 (about realisation events