Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) At some time during the period (the ownership period ) when the owner owned the interest, the sole or dominant activity of the * losing entity must consist of providing services directly to one or more entities (the group entities ) each of which is covered by one or more of the following paragraphs:
(a) the * gaining entity;
(b) an * affected owner;
(c) an entity that has at that time the same * ultimate controller as the losing entity or the gaining entity;
(d) if the conditions in section 727 - 110 (common - ownership nexus test) are satisfied for the * indirect value shift--an entity that has with the losing entity or with the gaining entity a * common - ownership nexus within that period.
(2) It must be reasonable to conclude that the total (the total market value ) of the * market values, immediately before the * realisation event, of * primary interests in the * losing entity then owned by * affected owners is less than it would have been if none of the following had happened:
(a) the * 95% services indirect value shift; and
(b) each * predominantly - services indirect value shift for which the same entity is the losing entity as for the 95% services indirect value shift, and that happened:
(i) if the amount of the * indirect value shift is $500,000 or more--at any time during the ownership period; or
(ii) otherwise--during the ownership period but within 4 years before the realisation event, or at the same time as the realisation event.
Thresholds for reduction of the total market value
(3) It must also be reasonable to conclude that the total * market value is less than it would have been by at least $500,000, and by at least the lesser of:
(a) 5% of the total of the * adjustable values of * primary interests in the * losing entity owned by * affected owners at:
(i) if subsection (4) applies--the time determined under that subsection; or
(ii) otherwise--the start of the income year in which the * realisation event happens; and
(b) the amount worked out under the table.
Alternative threshold for reduction of the total market value | ||
Item | In this case: | The amount is: |
1 | The ownership period is 4 years or less | worked out using this formula:
|
2 | The ownership period is more than 4 years | $25,000,000 |
(3A) If at the time referred to in subsection (3) a * primary interest covered by that subsection was * trading stock or a * revenue asset, its * adjustable value taken into account under that subsection is the greater of its adjustable value as a * CGT asset and its adjustable value as trading stock or a revenue asset.
(4) If the owner of the interest is an * affected owner because of item 1, 2, 3 or 4 in the table in subsection 727 - 530(1) (about who is an affected owner), the time for the purposes of subparagraph (3)(a)(i) of this section is the latest of:
(a) the start of the income year in which the * realisation event happens; and
(b) the start of the most recent period (if any):
(i) that ended before or at the time of the * realisation event; and
(ii) throughout which at least one of the group entities had the same * ultimate controller as the losing entity or the gaining entity; and
(c) the start of the most recent period (if any):
(i) that ended before or at the time of the realisation event; and
(ii) within which at least one of the group entities has with the losing entity or with the gaining entity a * common - ownership nexus.
