Document ID: chunk:federal_register_of_legislation:C2025C00029:section:5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 5
Character Range: 6695985–6698228

5                Any case                                                                                      each *active participant in the *scheme

 (2) An entity is an intermediate controller of another entity if, and only if:
 (a) the first entity *controls (for value shifting purposes) the other entity; and
 (b) the first entity is *controlled (for value shifting purposes) by an *ultimate controller of the other entity.

Active participants (if both losing and gaining entities are closely held)
 (3) An entity (the first entity) is an active participant in the *scheme if:
 (a) at some time during the *IVS period, neither the losing entity nor the gaining entity has 300 or more members (in the case of a company) or 300 or more beneficiaries (in the case of a trust); and
 (b) the first entity:
 (i) actively participated in, or directly facilitated, the entering into of the *scheme; or
 (ii) at some time during the *IVS period actively participated in, or directly facilitated, the carrying out of the scheme;
  (whether or not it did so at the direction of some other entity); and
 (c) at some time during the *IVS period, the first entity owned:
 (i) an *equity or loan interest in the losing entity or in the gaining entity; or
 (ii) an *indirect equity or loan interest in the losing entity or in the gaining entity; and
 (d) the first entity is neither the losing entity nor the gaining entity.
Note: Subsections 727‑110(2) and (3) contain rules about when an entity is treated as having or not having 300 or more members or beneficiaries.

Choices about method to be used

727‑550  Choosing the adjustable value method
 (1) This section sets out rules for:
 (a) choosing to use the *adjustable value method to work out the consequences of an *indirect value shift; or
 (b) choosing (when using the adjustable value method) not to work out on a *loss‑focussed basis the reductions in the *adjustable values of *affected interests.

Who makes the choice
 (2) The choice must be made in accordance with the table.

Who makes the choice
Item                  In this case:                                                                                                                            The choice must be made by: