Document ID: chunk:federal_register_of_legislation:C2014C00749:clause:15_3:p12
Version: federal_register_of_legislation:C2014C00749
Segment Type: clause
Provision Reference: sch 15 cl 3 (pt 12/13)
Character Range: 415927–418604

*indirect value shift, from the first entity to the other entity, that has consequences under this Division; and
 (d) whether the IVS scheme has consequences under Subdivision 727‑K because it results in a *presumed indirect value shift affecting a *realisation event happening to *equity or loan interests, or to *indirect equity or loan interests, in the first entity; and
 (e) those consequences.
Note: Section 725‑50 sets out when a direct value shift has consequences under Division 725.
 (3) If:
 (a) the IVS scheme is the DVS scheme; and
 (b) subsection 725‑145(2) is satisfied for the *direct value shift (because one or more equity or loan interests in the target entity are issued at a discount); but
 (c) subsection 725‑145(3) (about an increase in the market value of one or more equity or loan interests in the target entity) is not satisfied for the direct value shift;
Subdivisions 727‑A to 727‑K apply to the IVS scheme only as provided in this section.
 (4) Otherwise, those Subdivisions apply to the IVS scheme as provided in this section in addition to any other application they have to the scheme.

727‑910  Treatment of value shifted under the direct value shift
 (1) The first entity is treated as *providing economic benefits to the other entity, *in connection with the IVS scheme, at the time of a decrease (or future decrease) in the market value of any of the *down interests, to the extent that the decrease is (or will be) covered by subsection 725‑155(1).
 (2) Despite subsections 727‑150(4) and 727‑855(2) and (3), the market value of all economic benefits that subsection (1) of this section treats the first entity as providing to the other entity:
 (a) is to be determined as at the time immediately before the *IVS time, or immediately before the *realisation event, as appropriate; and
 (b) is equal to the total value shifted from the *down interests to the *up interests, as worked out under one or more applications of step 2 of the method statement in section 725‑365 or 725‑380.
 (3) The 2 entities are treated as not dealing with each other at *arm's length in relation to the providing of those benefits.
 (4) None of those benefits is treated as consisting of, or including, services provided or a right to have services provided.
Note: This means that the exclusions in Subdivisions 727‑C and 727‑G for indirect value shifts involving services will not apply.
 (5) Except as provided in this section, none of the following is treated as the *providing of economic benefits *in connection with the IVS scheme:
 (a) a decrease (or future decrease) in the market value of *down interests owned by the first entity or the other entity,